The Federal Reserve has signaled its determination to raise interest rates after the June truce

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Federal Reserve officials indicated they intend to resume interest rate hikes amid a growing consensus that more tightening is needed to curb high inflation in the world’s biggest economy.

According to the minutes of a June meeting of the Federal Open Market Committee, “nearly all” officials who attended said “additional increases” in the Fed’s benchmark interest rate would be “appropriate.”

He said a “tight” labor market and “upside risks” to inflation were still “key factors” nearly a year and a half after the US central bank began an aggressive cycle of raising interest rates to ease price pressures. were also shaping the outlook.

According to the minutes, some Fed officials supported a 25 basis point increase in interest rates in June, not to prevent further tightening that was ultimately supported by the committee. But most Fed officials noted “uncertainty” about the outlook and said additional information about the economy would be “valuable.”

On the economic outlook, Fed officials said they expect growth to remain “moderate” for the rest of the year, even though “banking stress” has “reduced” compared to the beginning of the year. According to the account, Fed staffers who briefed policymakers at the June meeting stuck to their previous expectation of a “moderate recession” starting later this year, followed by a “moderate recovery.”

The June meeting was the first respite in the Fed’s campaign to root out stubborn inflation after hitting a multi-decade high last year. After raising the benchmark interest rate at 10 consecutive meetings – sometimes rising in three-quarter or half-point intervals – central bank officials opted to hold it steady at a target range between 5 percent and 5.25 percent.

The Fed chairman, Jay Powell, justified the hold by saying that the effects of earlier rate hikes still needed to fully make their way into the economy, as well as the turmoil among regional banks earlier this year. Recruitment and development have also been affected due to the upheaval.

But additional rate hikes are widely expected this year, with most officials estimating the benchmark rate will ultimately be between 5.5 percent and 5.75 percent. That means two more quarter-point hikes, the first likely at the Fed’s next meeting later this month.

Speaking at a forum organized by the European Central Bank last week, Powell said he would “absolutely not step back from the negotiating table in frequent meetings”.

The outlook for further rate hikes stems from the surprising persistence of some price pressures, particularly in the services sector. The US labor market also remains very strong, providing a boost to consumer spending. By raising the cost of borrowing, the Fed aims to reduce demand throughout the economy.

Officials maintain a period of low-trend growth and job losses will be necessary to achieve the target of an average 2 percent rate of inflation. According to estimates published in June, policymakers broadly forecast the economy would grow 1 percent this year and 1.1 percent next year as the unemployment rate hit 4.5 percent. Unemployment was 3.7 percent in May.

Fed officials are not expected to cut any rates until 2024, raising expectations that “core” inflation, which strips out volatile food and energy prices, will remain well above the central bank’s long-term target.