Federal Reserve officials became more resolved last month to keep raising interest rates for longer to prevent higher inflation from becoming entrenched, even if that slowed the U.S. economy.
Policymakers increased interest rates by 75 basis points last month and backed hiking them 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 released Wednesday in Washington. They viewed maintaining the central bank’s credibility to control inflation as crucial.
"Many participants judged that a significant risk now facing the committee was that elevated inflation could become entrenched if the public began to question the resolve of the committee,” the minutes showed. "They recognized the possibility that an even more restrictive stance could be appropriate if elevated inflation pressures were to persist.”