U.S. Federal Reserve could raise interest rate one more time this year if the economy continues moderate expansion, the minutes of the Fed's latest monetary policy meeting showed Wednesday.
"Many participants thought that another increase in the target range (of the federal funds rate) later this year was likely to be warranted if the medium-term outlook remained broadly unchanged," said the minutes of the policy meeting which was held on Sept. 19-20.
Despite the short-term impact from Hurricanes Harvey, Irma, and Maris, Fed officials expect the course of the economy to remain unchanged in the medium term.
Low inflation this year has drawn concern from Fed officials, according to the minutes. Inflation only increased 1.4 percent in August, far short of the central bank's 2 percent target.
"Many participants expressed concern that the low inflation readings this year might reflect not only transitory factors, but also the influence of developments that could prove more persistent," said the minutes.
Fed officials remained divided over the inflation trend. Some argued secular trends, such as technological innovation and business pricing, might have pressed the inflation growth, while others stressed the further tightening of the labor market could increase upside risks to inflation.
In view of the uncertainty around the inflation outlook, some officials say whether the central bank should continue to raise interest rate this year should depend on incoming economic data, while others argue that interest rate hikes should be deferred until inflation was on track toward 2 percent target.
In its September meeting, the Fed kept interest rate unchanged, but announced that it would start to unwind its 4.5 trillion U.S. dollar balance sheet from October, a further step to end its loose monetary policy.
In view of the continuing labor market tightening, Fed chair Yellen said at the press conference in September that if the central bank didn't withdraw its monetary stimulus, the economy could overheat and inflation could move up more rapidly.
Investors now widely expected that the central bank would likely raise interest rates again in December.
