Most Fed Officials Expect Another Rate Hike by Year-End, but Stress Data Dependence

October 8 — According to the Federal Reserve meeting minutes released today, most officials anticipate raising interest rates once more before the end of the year, as inflation has remained above target for more than five consecutive years.

The minutes did not specify exactly when policymakers expect to implement the increase, but indicated that persistently high prices and a stable labor market could prompt the Fed's second rate hike of the year.

"Regarding the monetary policy outlook beyond this meeting, most participants judged that it would likely be appropriate to raise the target range for the federal funds rate again by the end of the year," the minutes stated.

However, the document also noted that "participants emphasized that they would approach each meeting with an open mind, and decisions at future meetings would depend on incoming information and its implications for the economic outlook and the balance of risks."

Discussions during the September meeting revealed that officials see risks of inflation remaining stubbornly persistent. The labor market was described as "near full employment," while overall economic growth has accelerated.

"Many participants emphasized that, from a risk management perspective, the path of raising the target range for the federal funds rate is a prudent step," the minutes said. "It provides protection against the risk that inflation could remain above target due to stronger-than-expected demand or further adverse supply shocks."