Federal Reserve minutes released on Wednesday showed its officials regarded the US economy’s outlook as uncertain in policy meeting held on September 19-20.
“A vast majority of participants continued to judge the future path of the economy as highly uncertain,” said the minutes.
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All Fed policymakers had agreed that the central bank should proceed carefully on rate decisions, and incoming data would help determine whether another hike was needed in coming months, said the minutes.
They also agreed that rates should stay high for some time to bring down the inflation. “All participants agreed that policy should remain restrictive for some time until (the Fed’s rate-setting) committee is confident that inflation is moving down sustainably toward its objective.”
Economic data from the past several months suggested that “inflation was slowing”, the minutes also said.
The Fed minutes also said that data volatility and revisions to prior statistical releases posed one set of problems in assessing the economy.
At its September meet, the board of governors of the Federal Reserve voted unanimously to maintain the interest rate at 5.4%.
The Fed policymakers also voted unanimously to approve the establishment of the primary credit rate at the existing level of 5.5%.
Overall inflation, as measured year over year, has dropped from a peak of 9.1% in June 2022 to 3.7% in August.
The latest data on consumer prices will be released on Thursday.
The Fed officials also showed concern about the risks of going too far with rate increases and slowing activity so much that it causes companies to lay off large numbers of workers.
Christopher Waller, a member of the Fed’s governing board on Wednesday said that higher long-term bond rates, by making many loans costlier for consumers and businesses, are doing “some of the work for us” in fighting inflation.
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Updated: 11 Oct 2023, 11:52 PM IST
