Federal Reserve May Raise Interest Rates Amid Inflation Concerns

The Federal Reserve Board's Federal Open Market Committee kept the benchmark federal funds rate unchanged at its August meeting, but it may follow suit by year's end.

The policy statement from the FOMC left markets and commentators wondering what the committee is waiting for. The Fed achieved 'maximum employment' but failed to meet its 2% inflation goal.

Three out of 12 voting members wanted a rate increase, while minutes from previous meetings show other committee members contemplating hikes as well.

The hawkish mood among FOMC members is understandable given the latest personal consumption expenditures price index, which declined only 0.1% from the previous month but remains 3.7% higher than last year.