Fed Minutes Highlight Inflation Concerns

Federal Reserve officials put aside concerns about the rising credit costs at their Aug. 7 meeting because they were not convinced a slowdown in inflation would last, Bloomberg reported.

Ten days before the Fed was cut a key interest rate, the Federal Open Market Committee was given lower growth forecasts by staff economists, and noted that “strains in financial markets” jeopardized economic expansion, according to the minutes of the meeting released late Tuesday, Bloomberg said.

Further turmoil might require a response, the FOMC said, though that sentiment did not appear in the statement immediately following the meeting.

“Given expectations that the most likely outcome for the economy was continued moderate growth, the upside risks to inflation remained the most significant policy concern,” the minutes said.