WASHINGTON, May 31: Federal Reserve members were “uncertain” about the need for more rate hikes in the face of inflation “around the upper end” of their acceptable range, minutes from a recent policy meeting released on Wednesday showed.

The summary of the May 10 meeting of the Federal Open Market Committee showed members increasingly concerned about inflation risks when they voted to raise the federal funds rate another quarter-point to five per cent.

Unlike the minutes of the March FOMC meeting, there was no specific mention at the May 10 session about reaching the end of the rate-boosting cycle, which has included 16 consecutive quarter-point hikes. But members appeared indecisive.

“Given the risks to growth and inflation, committee members were uncertain about how much, if any, further tightening would be needed after today’s action,” the minutes said.

The minutes contained several references to worries about inflation, but said that despite these concerns, “it appeared appropriate to characterise inflation expectations as ‘contained’.”

The members also said they saw some softening of economic activity and some “downside risks” to the US expansion.

The FOMC discussed the possibility of taking no action, raising rates 25 basis points or lifting them by 50 basis points, but in the end decided that the quarter-point hike was “appropriate today to keep inflation from rising and promote sustainable economic expansion.”

“Recent price developments argued for another firming step at Wednesday meeting,” the minutes showed.

“Core inflation recently had been a bit higher than had been expected, and several members remarked that core inflation was now at the upper end of what they viewed as acceptable range.”—AFP