Inflation has reached some of the highest levels in decades in different sections of the economy, from gas prices to the price of goods all across the grocery store. Powell and other officials said these price increases are sure to be temporary and will go back down as issues with the supply chain are resolved all over the world once the pandemic subsides.
For more reporting from the Associated Press, see below:
But the Fed minutes showed a growing concern that the unwanted price pressures could last for a longer time and the Fed should be prepared to move to reduce bond purchases more quickly or even start raising the Fed’s benchmark interest rate sooner to make sure inflation did not get out of hand.
“Various participants noted that the committee should be prepared to adjust the pace of asset purchases and raise the target range for the federal funds rate sooner than participants currently anticipated if inflation continued to run higher than levels consistent with the committee’s objectives,” the minutes said.
The Feds policy rate was cut to a record low of zero to 0.25 percent in spring 2020 as the Fed focused its efforts on keeping the COVID recession from spiraling into a deeper downturn.