Federal Reserve officials overwhelmingly concluded that they had more work to do to quell inflation after raising interest rates at their September meeting, according to minutes released on Wednesday. The Fed voted to raise rates by a quarter point to a range of 3.75 to 4 percent, supported by all 12 committee members. Projections showed 16 of 18 policymakers expected at least one more quarter-point move by year-end, pushing rates to 4 to 4.25 percent. Most wanted rates to stay at or above that level throughout 2027.
The minutes stated that higher rates were "prudent on risk-management grounds," providing insurance against persistently high inflation. Some officials suggested raising rates was necessary based on the current outlook for price pressures, while others said it would guard against public confidence loss. Several participants viewed previous policy settings as not restrictive enough.
At a news conference, Fed Chairman Kevin M. Warsh described the increase as removing a "dose of accommodation." He stopped short of affirming whether September's move was the first in a series, reflecting his opposition to providing guidance on next steps. Expectations for a rate hike at the Oct. 27-28 meeting were later reset by softer jobs data and comments from senior policymakers John C. Williams and Philip N. Jefferson, who said there was "no need for urgency."
The minutes noted that most officials were more worried inflation would intensify due to risks from the war with Iran, which has raised oil prices. Many flagged that longer energy prices remained elevated, the greater the risk of broader price pressures.
Source: New York Times Business · Summarized by HeadlinesBriefing