Fed Ponders Rate Hike as Inflation Lingers

The Federal Reserve is weighing the possibility of raising interest rates if inflation remains high. According to minutes from the Fed's July meeting, many officials think higher rates will be necessary to control inflation.

The minutes showed that 9 out of 12 policymakers who voted on the outcome supported keeping the key rate unchanged at about 3.6 percent. However, there is still a possibility that the Fed could raise rates in the coming months if inflation doesn't subside.

Mortgage rates have eased for the second week in a row, but remain elevated compared to last year. The average long-term US mortgage rate fell to 6.65 percent from 6.67 percent last week, while 15-year fixed-rate mortgages dropped to 5.95 percent from 5.96 percent.

Despite the recent pullback, mortgage rates have been mostly rising this year, limiting homebuyers' purchasing power. This has contributed to sluggish US home sales in 2023.

In other economic news, unemployment claims fell to 206,000 last week from a revised 212,000 the week before, indicating that layoffs remain low and most Americans enjoy job security.