Fed Policymakers Worry About Inflation, Rate Hikes Considered

The Federal Reserve's July meeting minutes show that policymakers are growing increasingly concerned about inflation. Several members of the committee are ready to raise interest rates, and many believe a hike in borrowing costs will be necessary if inflation does not decline to the central bank's 2% target. The policymakers who favour a rate increase argued that price pressures appear broad-based and that a more restrictive policy stance is needed to meet the Fed's commitment to achieving its goals.

The minutes of the July 28-29 meeting revealed that three committee members dissented in favour of a quarter-percentage point hike. However, a larger group of 'many' participants assessed that policy tightening would likely be necessary if inflation does not decline.