Most Fed officials back another rate hike before year-end

Federal Reserve headquarters

The Federal Reserve’s September minutes showed that most policymakers saw another rate hike as appropriate before the end of the year, as inflation remained elevated and price risks tilted to the upside, while the labor market remained stable and economic activity was strong.

Key takeaways from the meeting minutes, at which the Fed raised interest rates for the first time since 2023:

- Participants said inflation remained elevated.

-There had not been sufficient progress in bringing inflation down in recent months.

- Participants generally assessed inflation risks as tilted to the upside.

- Some participants said the expansion of artificial intelligence could put upward pressure on inflation.

- Many participants said prolonged elevated energy prices increased inflation risks.

- The possibility of further tariff increases also posed an upside risk.

- Inflation remaining above 2% for more than five years could affect consumer expectations and wage- and price-setting decisions.

- Labor market conditions were stable.

- Participants viewed the labor market as approaching maximum employment.

- Labor market risks had declined and were now broadly balanced.

- Economic activity was expanding at a strong pace.

- Continued expansion in artificial intelligence was boosting business investment.

- Consumer spending remained strong.

- A rate hike was viewed as a precautionary measure against persistent inflation.

- Several participants viewed the current policy rate as either not restrictive or only mildly restrictive.

- Decisions at upcoming meetings would depend on incoming data and information.

- They would also take into account the implications for the outlook and the balance of risks.