US Federal Reserve officials are in agreement that a cautious approach to future interest rate decisions is warranted, minutes from the Oct. 31-Nov. 1 meeting revealed Tuesday.
The minutes emphasize the need for policy decisions to be informed by incoming economic information and its implications.
The Fed chose to keep interest rates unchanged in the range of 5.25%-5.50%, a 22-year high.
While officials acknowledged the potential for further rate hikes if progress toward the 2% inflation target is deemed insufficient, they also stressed the importance of maintaining a restrictive stance until inflation clearly moves down sustainably.
The minutes highlight ongoing scrutiny of inflation risks, the impact of higher rates on demand, and the potential persistence of inflation. Despite strong growth in the third quarter, there are differing views among officials on the necessity of further rate hikes, with some advocating for a steady stance and others suggesting more tightening may be needed.
The upcoming December policy meeting will provide updated interest rate estimates. Fed Chair Jerome Powell affirmed the central bank's commitment to adjusting policy as needed to address inflation concerns.
"Recent indicators suggest that economic activity expanded at a strong pace in the third quarter,” the committee wrote in a statement. “Job gains have moderated since earlier in the year but remain strong, and the unemployment rate has remained low. Inflation remains elevated.”
Noting that the US banking system is “sound and resilient,” the committee said that tighter financial and credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation.
“The extent of these effects remains uncertain,” it added.
The Dow closed Tuesday down 63 points, 0.2%, at 35,088, the Nasdaq Composite shrank 85 points, 0.6%, to 14,200 and the S&P 500 declined 9 points, 0.2%, to 4,538.