Fed minutes: Another rate hike likely coming this year to combat persistent inflation

Most Federal Reserve officials expect that another interest rate increase will likely be needed this year to combat inflation, according to minutes released on Wednesday from the central bank’s most recent meeting.

The officials unanimously agreed that inflation was still elevated and had not made much progress towards their 2.0 per cent target in recent months, the minutes said. The Fed increased its key interest rate at the September 15-16 meeting by a quarter-point to about 3.9 per cent, its first increase in three years.

The increase defied President Donald Trump’s repeated calls for the Fed to cut rates and prompted the president to criticise the Fed’s rate-setting committee, though he still expressed support for Chairman Kevin Warsh, whom he appointed earlier this year. The rate increase comes as Americans are already struggling with high costs for groceries, gas and housing, and as affordability has taken on a leading role in the upcoming mid-term elections, just seven weeks away.