Federal Reserve officials warned of 'upside risks' to inflation during their July meeting that could warrant additional interest rate hikes this year.
Arbor Financial President Jeffrey Small argues recent economic data suggests the Fed will decrease rates in the second quarter next year on 'Varney & Co.'signaled during their July policy-setting meeting that high inflation still poses an ongoing threat that could necessitate additional interest rate hikes this year.
"With inflation still well above the Committee’s longer-run goal and the labor market remaining tight, most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy," the minutes said. "We intend again to keep policy restrictive until we’re confident that inflation is coming down sustainably to our 2% target, and we’re prepared to further tighten if that is appropriate," Chairman Jerome Powell told reporters after the meeting.
"In discussing the policy outlook, participants continued to judge that it was critical that the stance of monetary policy be sufficiently restrictive to return inflation to the Committee’s 2 percent objective over time," the minutes said.
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