Fed Officials Eye Rate Hike as Inflation Persists Above Target

Recent minutes from the Federal Reserve's July meeting reveal that officials are considering a rate hike if inflation doesn't cool down. The Fed voted 9-3 to keep the benchmark federal funds rate unchanged in its current target range of 3.5 percent to 3.75 percent.

The central bank's 2 percent inflation target has been elusive for over five years, with prices continuing to rise too rapidly. Officials acknowledge that successive supply shocks have repeatedly delayed the expected return of inflation to 2 percent.

Some participants believe current financial conditions might not be restrictive enough to support a return to the institution's 2 percent inflation target. The Fed places greater emphasis on its preferred inflation measure, the personal consumption expenditures (PCE) price index, which has been firmly above 3 percent.