U.S. Federal Reserve officials believed that an increase of 50 or 75 basis points would likely be appropriate at the next meeting, recognizing the possibility of an even more restrictive stance, according to the minutes of the Fed's latest policy meeting released Wednesday.
RELATED:
First Half of 2022 in Wall Street Was the Worst Since 1970
"Participants noted that inflation remained much too high and observed that it continued to run well above the committee's longer-run 2 percent objective," showed the minutes of the Federal Open Market Committee's June 14-15 meeting.
Total personal consumption expenditures prices - the Fed's preferred measure of inflation - had risen 6.3 percent over the 12 months ending in April, while the 12-month change in the Consumer Price Index (CPI) in May "came in above expectations," the minutes noted.
"Participants were concerned that the May CPI release indicated that inflation pressures had yet to show signs of abating, and a number of them saw it as solidifying the view that inflation would be more persistent than they had previously anticipated," the minuted said.
Participants observed that some measures of inflation expectations had moved up recently, the minutes added.
On its June meeting, the central bank raised its benchmark interest rate by 75 basis points, marking the sharpest rate hike since 1994, and taking the level of the federal funds rate to a range of 1.5 to 1.75 percent. Fed officials had signaled a 50 basis point rate hike for the June meeting, before making a last-minute change in light of disappointing inflation data.
"Participants judged that an increase of 50 or 75 basis points would likely be appropriate at the next meeting," the minutes said.
"Participants concurred that the economic outlook warranted moving to a restrictive stance of policy, and they recognized the possibility that an even more restrictive stance could be appropriate if elevated inflation pressures were to persist," the minutes noted.