“Almost all participants agreed that it was appropriate to raise the target range for the federal funds rate by 25 basis points,” said the minutes of the January 31-February 1 meeting, which were published on Wednesday.
Many respondents said this would allow the Fed to better “range” future increases.
However, “respondents noted in general that the rising risks to inflation expectations remain a key factor in shaping monetary policy expectations,” and that it would require raising interest rates and keeping them high “for inflation to reach the 2 percent target.”
Only a “few” of participants in the meeting supported a larger half-percentage-point increase in interest rates, or said they “could support it”.
The minutes showed that the Federal Reserve is heading towards a possible end point to increase current interest rates, as well as heading to slow the pace in order to approach more cautiously a possible stopping point while leaving open the extent to which rates will eventually be raised in the event that inflation does not slow.
The minutes indicated that “participants agreed that the (Federal Open Market) Committee has made significant progress over the past year in moving toward a sufficiently restrictive mode of monetary policy.”
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