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Federal Reserve officials raised concerns during their January policy-setting meeting about the risks of moving too quickly to cut interest rates, even as they welcomed recent declines in inflation.
Minutes from the U.S. central bank's Jan. 30-31 meeting released Wednesday showed that officials remain attentive to inflation risks, with some concerned that progress toward the Fed's 2% target could stall.
While Fed officials agreed that interest rates are likely at their peak, they also expressed hesitance to begin reducing rates amid fears that it could stoke higher inflation.
«In discussing the policy outlook, participants judged that the policy rate was likely at its peak for this tightening cycle,» the minutes said. «Participants generally noted that they did not expect it would be appropriate to reduce the target range for the federal funds rate until they had gained greater confidence that inflation was moving sustainably toward 2 percent.»
FED SKIPS AN INTEREST RATE HIKE, BUT HIGH MORTGAGE RATES COULD BE HERE TO STAY
Federal Reserve Chair Jerome Powell attends a news conference in Washington, D.C., on Sept. 21, 2022. (Chen Mengtong/China News Service via / Getty Images)
Officials voted at the January meeting to hold interest rates steady at a range of 5.25% to 5.5%, the highest level since 2001. But policymakers also cracked open the door to reducing rates later this year if inflation continues to subside.
Although policymakers acknowledged in their post-meeting statement that «risks to achieving its employment and inflation goals are moving into better balance,» they cautioned
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