All Fed officials backed vote to hike benchmark rate: FOMC minutes
Inflation expectations among consumers rose last month for both the one-year and three-year time horizons, the Federal Reserve Bank of New York said Wednesday.
Most US Federal Reserve policymakers anticipate another interest rate hike by the end of the year, as the central bank battles persistent high inflation, according to minutes from a September meeting. The Federal Open Market Committee had previously raised rates by 25 basis points to a range of 3.75-4.00 percent during their September meeting.
US households and businesses have faced years of high prices post-pandemic, with the Fed struggling to hit its two-percent inflation target for over half a decade. Most participants at the meeting believed another increase in the federal funds rate target range would be appropriate by year-end. Several participants felt the previous policy rate was not restrictive enough for economic activity.
The Fed has a dual mandate of controlling inflation while maintaining maximum employment. Despite relative stability in the US unemployment rate, job growth has been inconsistent. US Personal Consumption Expenditures price index inflation peaked at 7.2 percent in June 2022 before declining to 2.2 percent in September 2024, and now increasing again.
Energy costs have been significantly impacted by Iran's actions and President Trump's economic policies. Inflation risks were mostly seen as upside risks, while labor market risks were diminishing and balanced. However, participants noted insufficient progress in lowering inflation recently, attributing it to geopolitical developments and surging investments in AI.
They expressed concern that prolonged high energy prices could lead to broader price pressures across sectors.
Written by urgent.news from Hindustan Times - World News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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