FOMC Minutes:
Most participants said inflation risks could require further interest rate hikes.
Most participants saw continued ‘significant’ upside inflation risks.
A number of participants warned of risks of accidentally tightening policy too much
Uncertainty of U.S. economic outlook remains elevated; future Federal Reserve policy decisions to be driven by the totality of data from the July 25-26 meeting.
Most participants said inflation risks could require further interest rate hikes.
A couple of participants favored holding interest rates steady at the July meeting.
A number of participants saw economic risks becoming more balanced.
Participants said inflation was ‘unacceptably high,’ and more evidence is needed to be confident that price pressures are ebbing.
Participants said a gradual slowdown in economic activity appeared to be happening.
Participants still saw below-trend growth and a softer labor market as necessary for restoring economic balance.
Amid uncertainty about monetary policy lags, participants said rate hikes are working as intended.
The banking system is ‘sound and resilient,’ but tighter credit conditions are likely to weigh on the economy.
Staff no longer see the economy entering a mild recession this year and now predict below-trend growth in 2024 and 2025.
Participants said the labor market is still ‘very tight,’ although signs are emerging that labor demand is in better balance.