Fed policymakers' inflation concerns grew at June meeting, minutes show

Source: msn/Reuters

12h


WASHINGTON, July 8 (Reuters) - Concern about high inflation mounted at the U.S. central bank's meeting last month, as officials followed Federal Reserve Chairman Kevin Warsh's lead to a more stripped-down policy statement even amid concerns that price increases were broadening and might require interest rate hikes.

A "few participants" at the June 16-17 meeting said there was already a case to raise borrowing costs, even though they ultimately agreed with their colleagues to hold rates steady "at this meeting."

The broader debate, however, seemed evenly divided, minutes of the session showed on Wednesday, with "most participants" seeing a scenario in which inflation would fall towards the Fed's 2% target on its own, but also one in which it would remain high. "Almost all" of that latter group considered a rate increase as necessary if higher inflation persisted.

It was clear from the readout that inflation dynamics were unsettling for a number of policymakers, with new concerns such as the inflationary impact of booming investments in artificial intelligence introduced into the debate. "Participants generally assessed that information received over the inter-meeting period suggested that upside risks to price stability remained elevated while downside risks to achieving maximum employment had moderated a bit," the minutes said.

Read more: https://www.msn.com/en-us/money/general/fed-policymakers-inflation-concerns-grew-at-june-meeting-minutes-show/ar-AA27v71H