Federal Reserve Officials Worried About Risks of Faster Inflation at Last Meeting

Federal Reserve officials fretted about the level and staying power of inflation at their September meeting, minutes from the gathering showed, and “many” emphasized that the risk of doing too little to control price increases outweighed the risk of doing too much.

Central bankers have lifted their benchmark interest rate five times this year as they try to slow consumer demand and drive down rapid inflation, including large three-quarter-point increases at each of their last three meetings. At their last meeting, policymakers projected that they would raise interest rates by another 1.25 percentage points by the end of the year. The Fed’s aggressive action — and those forecasts — came as central bankers worried about continued risks that could keep inflation elevated.

Inflation “remained unacceptably high,” according to the September meeting notes, which were released on Wednesday. They said price increases had been slowing less readily than officials had expected and cited reasons they could remain surprisingly fast.

“Some participants noted rising labor tensions, a new round of global energy price increases, further disruptions in supply chains and a larger-than-expected pass-through of wage increases into price increases as potential shocks that, if they materialized, could compound an already challenging inflation problem,” according to the minutes.

Article source: https://www.nytimes.com/2022/10/12/business/federal-reserve-minutes-september.html