- Fed meeting minutes
While Fed officials were satisfied with the progress in the US economy this year, they appeared concerned over the persistent sluggishness of price inflation. Minutes of the Fed's most recent meeting showed that policy makers were almost ready to hike rates as they expected the US economy's steady upward trajectory to eventually push prices up. Yet, inflation continues to defy those predictions. The biggest decline in airline fares in almost two decades slowed consumer inflation in July after two months of slightly faster growth. According to the Labor Department, consumer price index inched up 0.1% in July, compared with the 0.3% and 0.4% increases in July and May, respectively. At the same time, core inflation, which excludes energy and food, climbed a modest 0.1% in the reported month, following the 0.2% gain in June. Measured on an annual basis, consumer prices were 0.2% higher, while core inflation rose 1.8%. Thus, Fed voting members remained divided on whether long-anticipated September rate hike was justified. Some officials were worried about moving prematurely and lacking tools to respond if unanticipated events led the US economy to falter, and also about threats from developments overseas, particularly slowing growth in China. As a result, some experts said the uncertain tone of the meeting minutes suggested the central bank was less likely to begin normalizing monetary policy at its next meeting, while investors reduced their bets on a September lift-off.
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