Federal Reserve
policymakers were increasingly split on the outlook for inflation and
how it might affect the future pace of interest rate rises, according to
the minutes of the Fed's last policy meeting on June 13-14 released on
Wednesday.
The
details of the meeting, at which the U.S. central bank voted to raise
interest rates, also showed that several officials wanted to announce a
start to the process of reducing the Fed's large portfolio of Treasury
bonds and mortgage-backed securities by the end of August but others
wanted to wait until later in the year.
The committee questioned why financial conditions had not tightened despite recent rate rises and a few said equity prices were elevated.
U.S. stock prices were up slightly at the close of trade while yields on U.S. government debt dipped. The dollar was little changed against a basket of currencies.
Last month's 8-1 vote to lift the benchmark interest rate another quarter percentage point, its second this year, signalled the Fed's confidence in a growing U.S. economy and the eventual inflationary effects of low unemployment.
In a press conference at the time, Fed Chair Janet Yellen described a recent decline in inflation as temporary and the central bank kept its forecast of one more rate rise this year and three the next.
Some policymakers since then, however, have shown increasing worry about the Fed's struggle to get inflation back to its 2 percent objective.
The Fed's preferred measure of underlying inflation slipped again in May to 1.4 percent, the Commerce Department reported on Friday, and has run below target for more than five years.
In the minutes, a few policymakers also said the inflation weakness made them less comfortable with the current implied path of rate hikes.
The committee questioned why financial conditions had not tightened despite recent rate rises and a few said equity prices were elevated.
U.S. stock prices were up slightly at the close of trade while yields on U.S. government debt dipped. The dollar was little changed against a basket of currencies.
Last month's 8-1 vote to lift the benchmark interest rate another quarter percentage point, its second this year, signalled the Fed's confidence in a growing U.S. economy and the eventual inflationary effects of low unemployment.
In a press conference at the time, Fed Chair Janet Yellen described a recent decline in inflation as temporary and the central bank kept its forecast of one more rate rise this year and three the next.
Some policymakers since then, however, have shown increasing worry about the Fed's struggle to get inflation back to its 2 percent objective.
The Fed's preferred measure of underlying inflation slipped again in May to 1.4 percent, the Commerce Department reported on Friday, and has run below target for more than five years.
In the minutes, a few policymakers also said the inflation weakness made them less comfortable with the current implied path of rate hikes.
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