Policymakers started supporting slowing the pace of interest rate hikes “soon,” minutes from the Federal Reserve’s November meeting showed.
“A substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate,” according to the minutes, adding that a slower pace would better allow the Fed to assess progress toward its goals of maximum employment and price stability.
“The uncertain lags and magnitudes associated with the effects of monetary policy actions on economic activity and inflation were among the reasons cited regarding why such an assessment was important,” the minutes continued.
The Fed has aggressively raised interest rates to combat US inflation at 40-year highs. It’s hiked the benchmark interest rate by 75 basis points four consecutive times, lifting the fed funds rate from near zero to 4% as it aims to tame inflation to its 2% target.
According to the minutes, some officials even warned that continued rapid monetary policy tightening increased the risk of instability or dislocations in the financial system.