The minutes of the U.S. Federal Reserve's (Fed) Federal Open Market Committee (FOMC) meeting held on September 15-16 have been released. The minutes showed that one more increase in the federal funds rate target range is on the agenda before the end of the year.
In its last meeting, the Fed raised the policy rate by 25 basis points to the 3.75-4 percent range, in line with expectations. The minutes stated that this decision was supported by all participants.
EMPHASIS ON INFLATION RISK
The minutes reported that officials generally maintained the view that inflation risks are tilted to the upside. Some officials expressed that these risks have increased further in recent months.
Investments in artificial intelligence infrastructure were also among the topics evaluated at the meeting. Some officials stated that these investments could cause aggregate demand to exceed aggregate supply in the medium term and create additional pressure on inflation.
The minutes included the statement, "Most participants judged that, regarding the monetary policy outlook beyond the current meeting, one more increase in the target range for the federal funds rate would likely be appropriate before the end of the year."
In assessments regarding the labor market, it was anticipated that conditions would generally remain stable and that the unemployment rate would hover near current levels. Officials shared the view that risks to the labor market were largely balanced.
Many Fed officials assessed that despite the recent rise in long-term Treasury bond yields, financial conditions continue to appear supportive of economic growth. In the section on balance sheet policy, some officials noted that Treasury markets were functioning smoothly but pointed to the importance of planning against potential market stress.
News Source: 12punto
