Despite some signs that two years of rate hikes are slowing down the U.S. economy,
officials still generally believe that higher inflation remains a threat.
According to the minutes of the two-day October meeting of the policymaking
Federal Open Market Committee
, all of the participants at the gathering expressed concern about the outlook for inflation. Most felt core inflation would edge lower, but the current rates of price growth are "uncomfortably high."
The Fed said available economic data suggest that medium- and long-term inflation forecasts remain around the levels seen for the past several years, although in the view of some bankers "these expectations were probably higher than would be consistent with their assessment of long-run price stability."
Inflation projections could begin to drift upward if core inflation stays elevated for a protracted period, the Fed said.
"Any such rise in inflation expectations and associated upward pressure on inflation itself would likely prove costly to reverse," the minutes, released Wednesday, read.
"Although some participants noted that the recent slowing in core inflation had helped to allay their fears of a further sustained increase in inflation, all participants emphasized that the risks around the desired downward path to inflation remained to the upside," the minutes continued.
The FOMC voted last month to keep the target federal funds rate at 5.25%, where it has been since June. Only Richmond Fed President Jeffrey Lacker voted against the pause, saying he favored a quarter-point increase.