Fed minutes: Another rate hike likely coming this year to combat persistent inflation

Most Federal Reserve officials predict another interest rate hike will likely be required this year to tackle persistent inflation, based on minutes released Wednesday from the central bank's latest meeting. During the September 15-16 meeting, the Fed raised its key interest rate by 0.25% to approximately 3.9%, marking the first increase in three years.

President Donald Trump had urged the Fed to lower rates, which led to criticism of the Fed's rate-setting committee, though Trump continued to support Chair Kevin Warsh, appointed earlier this year. Inflation remains elevated, with the Fed's preferred measure showing a 3.4% increase compared to a year ago, while core prices rose by 3%.

Despite a recent rise in long-term interest rates due to factors like government debt, tech firm borrowing, oil and gas prices, and signs of elevated growth and inflation, key policymakers stated that the Fed can take time to evaluate the economy's impact before taking further action. Wall Street expects the Fed to keep rates unchanged at its next meeting on October 28-29, with another possible increase in December.

Fed Vice Chair Philip Jefferson mentioned that policymakers need to make their own judgment, which may take more time. While inflation dipped in August but remained high, several officials believe financial conditions support economic growth, suggesting more rate hikes to curb inflation.