More US rate hikes coming but 'at some point' pace will slow: Fed

More US rate hikes coming but 'at some point' pace will slow: Fed

The Federal Reserve remains committed to raising interest rates further to quell rising prices, but agrees that "at some point" it would be appropriate to slow the pace of such hikes, according to meeting minutes
The Federal Reserve remains committed to raising interest rates further to quell rising prices, but agrees that "at some point" it would be appropriate to slow the pace of such hikes, according to meeting minutes. Photo: Jim WATSON / AFP/File
Source: AFP

New feature: Check out news exactly for YOU ➡️ find “Recommended for you” block and enjoy!

US central bankers remain committed to raising interest rates further to quell rising prices, but agreed that "at some point" it would be appropriate to slow the pace of such hikes, the Federal Reserve said Wednesday.

In the minutes of the July policy meeting, which produced a second massive increase of 0.75 percentage points, the Fed officials said it will take some time to bring "unacceptably high" inflation back down near the two percent goal.

But they cautioned that there is a "risk" the Fed could go too far as it tries to cool demand to lower prices.

The central bank has raised the benchmark borrowing rate four times this year, including two massive three-quarter-point increases in June and July after US annual inflation spiked to 9.1 percent in June.

Read also

Workers' strike targets power stations in Nigeria

Consumer prices slowed in July to 8.5 percent, and soaring gas prices, exacerbated by the war in Ukraine, have fallen in recent weeks.

Members of the Fed's policy-setting Federal Open Market Committee (FOMC) noted the recent decline in energy prices and some signs that supply constraints have eased.

PAY ATTENTION: Follow us on Instagram - get the most important news directly in your favourite app!

However, they said falling oil prices "cannot be relied on" to lower overall inflation.

Instead, slowing demand will be a key factor in curbing price pressures, the minutes said.

The rapid, aggressive moves by the central bank have started to have an impact, and the minutes said while officials expected the US economy to continue to expand in the second half of the year, "many expected that growth in economic activity would be at a below-trend pace."

Source: AFP

Online view pixel