Fed officials feared inflation pressures could spread, minutes show

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1. 1h ago

   Fed Officials Signal More Rate Hikes to Fight Spreading Inflation

   Federal Reserve officials expressed unanimous support for a rate hike at their September 15-16 meeting and indicated that another increase will likely be needed before the end of the year. Meeting minutes released Wednesday show central bank policymakers worried that higher costs tied to energy, artificial intelligence investment, and other shocks could spill over into broader and more persistent price pressures. While officials maintain consensus on further tightening, they left the exact timing open. Meanwhile, mortgage rates have climbed to a three-year high above 7 percent amid a global bond sell-off.

   Why it matters

   The central bank is grappling with inflation that has run above target for more than five years. Policymakers are attempting to balance aggressive monetary tightening against shifting economic signals and surging borrowing costs. Federal Reserve Governor Waller stated that more hikes are needed while emphasizing flexibility regarding the pace of future increases.

   What is confirmed

   • Federal Reserve officials expect that another interest rate increase will likely be needed this year to combat inflation, according to minutes released Wednesday from the central bank's most recent meeting.
   • The Federal Reserve was unanimous about raising interest rates at its September 15-16 policy meeting.
   • Fed officials worried that higher costs tied to energy, artificial intelligence investment, and other shocks could spill over into broader, more persistent price pressures.

   Still unconfirmed

   • US consumer sentiment is forecast to fall to 47.6 as investors watch whether rising inflation expectations will keep the Federal Reserve hawkish.

   What to watch next

   • Upcoming U.S. services sector data and consumer sentiment reports.
   • Earnings returns from companies like Levi Strauss and PepsiCo to gauge consumer health.
   Sources used for this update (13)

   1. Axios — Fed officials feared inflation pressures could spread, minutes show
   2. Bloomberg.com — Fed Minutes Show Hawkish Unity Behind September Rate Hike
   3. abcnews.com — Federal Reserve officials expect another rate hike will be needed this year, according to minutes
   4. Yahoo Finance — The Fed was unanimous about raising rates in September. Economic signals have since changed.
   5. www.cnbc.com — Fed officials see another hike coming, but no sign as to when ...
   6. finance.yahoo.com — Fed Policymakers Think Another Interest Rate Hike Is Likely ...
   7. Axios — The Fed's going to take its time with rate hikes
   8. Reuters — Fed's Waller: More hikes needed, but there is 'flexibility' about the pace
   9. www.mitrade.com — Dollar Index flatlines as Fed Governor Waller puts no date on more hikes
   10. www.markets.com — US Consumer Sentiment Preview: Will Rising Inflation Expectations Keep the Fed Hawkish?
   11. finance.yahoo.com — Five things to watch in markets in the week ahead
   12. ground.news — Fed officials see another hike coming, but no sign as to when ...
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