WASHINGTON (AP) — Most of last month’s Federal Reserve officials still viewed rising inflation as a continuing threat that could require more interest rate increases, according to the minutes of their meeting. Meeting July 25-26 Released Wed.
At the same time, officials saw “a number of tentative signs that inflation pressures may be easing.” Divergent Viewpoint reiterated Chairman Jerome Powell’s noncommittal stance on future rate hikes in a press conference after the meeting.
According to the minutes, Fed policymakers also felt that despite signs of progress on inflation, it remained well above their 2% target. They “will need to see more data…to be confident that inflation pressures are easing” and on track to return to their target.
At the meeting, the Fed decided to raise its benchmark interest rate for the 11th time in 17 months in its ongoing campaign to curb inflation. But in a statement after the meeting, he offered little guidance on when – or if – he might raise interest rates again.
Most investors and economists said they believed the July rate hike would be the last. Earlier this week, economists at Goldman Sachs predicted that the Federal Reserve would actually start cutting interest rates by the middle of next year.
Since the Fed’s meeting last month, more data has pointed in the direction of a “soft landing,” in which the economy will slow enough to bring inflation toward the central bank’s 2% target without falling into a deep recession. The Federal Reserve raised the key interest rate to a 22-year high of around 5.4%.
Inflation has slowed further, according to the latest readings of “core” prices, a closely watched category that excludes volatile food and energy prices. Core prices rose 4.7% in July from a year earlier, The smallest increase since October 2021. Fed officials track core rates, which they believe provide a better read of core inflation.
Overall consumer prices rose 3.2% in July from a year earlier, higher than the previous month’s pace due to higher gas and food costs. However, this is well below the inflation rate peak of 9.1% in June 2022.
However, that progress was made without the sharp increase in unemployment that many economists predicted would follow the Fed’s series of sharp rate hikes, the fastest in four decades.
