Economic Buzz: US Fed minutes says rate hike likely if inflation doesn't ease

The Federal Open Market Committee (FOMC) released its minutes from the July meeting on Wednesday, in which officials indicated that they would need to raise interest rates soon unless further progress was made in reducing inflation.

Many participants assessed that policy tightening would likely be necessary if inflation did not decline, the document showed. Some participants commented that financial conditions might not currently be sufficiently restrictive to facilitate a return of inflation to 2 percent.

The committee voted 9-3 to maintain the federal funds rate target, which has been set at 3.5% to 3.75% for the entire year. Furthermore, the institution estimated that inflation would decrease during the second half of the year, as retail gasoline prices were forecast to move lower and core inflation was predicted to drop slightly and reach roughly 2% in 2028.

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