As U.S. voters continue to struggle through record-high inflation rates, President Joe Biden’s Federal Reserve officials made a bold move last month to battle the issue.
According to the minutes from the Federal Open Market Committee’s June meeting, Fed officials reportedly all agreed that a little pain for the economy would be necessary to attempt to get a grip on the inflation crisis, CNBC reported.
The officials held nothing back during the June meeting, writing, in part, 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 near-term inflation outlook had deteriorated since the time of the May meeting,” the minutes said.
It added: “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.”
Fast-forward a month, and it was noted that the Fed, “with unusual clarity,” announced that at least a 50 basis point hike is coming in July.
In other words, rumors of additional interest rate hikes are more likely than not.
Federal Reserve policy makers backed raising rates at their next meeting in July by either 50 or 75 basis points, according to minutes of the Federal Open Market Committee’s June 14-15 policy meeting https://t.co/Q98aUcQGMd
— Bloomberg Markets (@markets) July 6, 2022
“In discussing potential policy actions at upcoming meetings, participants continued to anticipate that ongoing increases in the target range for the federal funds rate would be appropriate to achieve the Committee’s objectives,” the minutes said.
“In particular, participants judged that an increase of 50 or 75 basis points would likely be appropriate at the next meeting.”
The June interest rate raise of 75 basis points in June, Fox Business noted, was the highest raise in roughly three decades.
Many financial experts expect that the Fed will continue to raise rates through the end of 2022, and perhaps even into 2023, with the hopes of getting control of the inflation crisis. Unfortunately for the country, that could signal hard times ahead for many.