Federal Reserve policymakers said they will forge ahead with further rises in interest rates, with some talking of pushing borrowing costs into restrictive territory, as the central bank seeks to prevent inflation from overshooting its target.
Despite outspoken criticism of rate rises from President Donald Trump, a number of Fed policymakers said in their September meeting that they thought it may become necessary to temporarily boost rates above levels they expect in the longer run. This would prevent inflation from getting too hot and ward off risks of financial excesses, the central bankers said.
A few officials thought policy should become “modestly restrictive” for a time, according to minutes of the meeting, held on September 25-26. “Participants generally anticipated that further gradual increases in the target range for the federal funds rate would most likely be consistent with a sustained economic expansion, strong labour market conditions, and inflation near 2 per cent over the medium term,” the record stated.