Federal Reserve officials were increasingly concerned at their meeting last month that consumers were starting to anticipate higher inflation, and they signaled that much higher interest rates could be needed to restrain it.
The policymakers also acknowledged, in minutes from their June 14-15 meeting released Wednesday, that their rate hikes could weaken the economy. But they suggested that such steps were necessary to slow price increases back to the Fed's 2% annual target.
The officials agreed that the central bank needed to raise its benchmark interest rate to “restrictive” levels that would slow the economy’s growth and “recognized that an even more restrictive stance could be appropriate” if inflation persisted.
After last month's meeting, the Fed raised its rate by three-quarters of a point to a range of 1.5% to 1.75% — the biggest single increase in nearly three decades — and signaled that further large hikes would likely be needed.