Fed officials warned rate hikes may be needed if inflation stays high

Fed officials’ latest meeting minutes show growing concern that inflation may not be restrained enough by current interest rates, with multiple participants warning that rate hikes could be needed if inflation stays high. While the Fed held rates steady at its late-July meeting, three officials dissented in favor of a quarter-point increase, citing inflation still above the Fed’s 2% target for years. Recent consumer prices rose only 0.1% in July, the second consecutive month of calmer inflation, aided by a temporary drop in energy prices. However, officials noted risks from intensified fighting raising gas prices and warned underlying pressures remain elevated, including wage and price expectations.