FOMC Voters Said Next Hike Depends on Inflation
Many Federal Reserve policymakers in their September meeting worried over whether recent low inflation readings this year were transitory and some said they wanted to feel more confident that inflation was moving higher before raising interest rates again.
Others expressed concern over upside risks for inflation given the tightness of the labor market, minutes of the meeting showed Wednesday.
The account highlights the range of opinions on the Federal Open Market Committee after their preferred measure of inflation, the core personal consumption expenditures price index, decelerated from a 1.9% annual pace earlier this year to just 1.4% in August.
“Many participants thought that another increase in the target range later this year was likely to be warranted if the medium-term outlook remained broadly unchanged,” the account of the Sept. 1920 meeting said.
“Several others noted that, in light of the uncertainty around their outlook for inflation, their decision on whether to take such a policy action would depend importantly on whether the economic data in coming months increased their confidence that inflation was moving up toward the Committees objective,” the minutes said.
“A few participants thought that additional increases in the federal funds rate should be deferred until incoming information confirmed that the low readings on inflation this year were not likely to persist and that inflation was clearly on a path toward the Committees symmetric 2% objective over the medium term.”