The latest meeting minutes from the U.S. Federal Reserve show that the central bank remains committed to lowering inflation through higher interest rates.
At their most recent meeting, Fed officials said that there are growing signs inflation is coming down, but not enough to remove the need for future interest rate hikes.
The January 31 to February 1 meeting concluded with the Fed raising interest rates by 25-basis points. However, central bank officials remain concerned about high inflation and its impact on the U.S. economy.
In the meeting minutes, Fed officials note that the U.S. inflation rate, at an annualized 6.4%, remains well above the central bank’s 2% target. At the same time, labour markets continue to be “very tight, contributing to continuing upward pressures on wages and prices.”
The most recent interest rate increase brought the U.S. fed funds rate to a target range of 4.50% to 4.75%. But the minutes show that the scaled back pace of rate hikes comes with a high degree of concern that inflation is still a threat in America.
“Substantially more evidence of progress across a broader range of prices would be required to be confident that inflation was on a sustained downward path,” read the meeting minutes.
The meeting summary emphasizes that Fed officials believe ongoing rate hikes will be necessary to bring inflation closer to the central bank’s 2% target.
The most recent 25-basis point rate hike received unanimous approval among central bank officials, the minutes show.
