Fed Minutes Cite Housing Slump, Inflation Concerns

Federal Reserve officials acknowledged they underestimated the length of the U.S. housing slump, and continued to view inflation as the biggest risk to the economy.

“The correction of the housing sector was likely to continue to weigh heavily on economic activity through most of this year,” stated the minutes of the May 9 meeting of the Federal Open Market Committee, which were released Wednesday.

That assessment was “somewhat longer than previously expected,” the Fed said.

The Fed left the benchmark interest rate at 5.25% at the meeting, for a seventh straight time.