Federal Reserve officials stated that more rate hikes could be necessary in the future as the central bank expressed concern on the pace of inflation.
“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,” wrote the minutes from July’s meeting.
The minutes also showed that most officials were worried that the inflation fight is far from over, which could mean that they have to tighten its policy further or. The central bank said that it would remain cautious even while some Fed members believed that more hikes would be unnecessary.
The Fed hiked its policy rates in July to 5.25%-5%, the highest level in more than 22 years.
The market largely believed that the Fed would pause to see the development of inflation in September with 86.5% odds backing up, while only 13.5% believed that Fed would continue to hike rates. However, the probability of the Fed maintaining rates at the current level in November’s meeting drops to 59.5%, while those who believe the central bank to raise rates by 25 basis points increase to 36.3%.
