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Federal Reserve determined to ‘proceed carefully’ on inflation policy

Officials saw ‘two-sided’ risks in interest rate path at last meeting before recent Treasury market sell-off

Federal Reserve officials agreed in September that the US central bank should “proceed carefully” on interest rate decisions, while acknowledging that monetary policy should remain restrictive for some time, according to minutes from their latest meeting.

Members of the Federal Open Market Committee sounded a cautious note, saying there were “two-sided” risks in pursuing its 2 per cent inflation target. Officials did not raise interest rates at the meeting.

At the time of the meeting, officials were leaning towards the likelihood of another rate increase. A “majority” of participants suggested another increase might be appropriate, and “some” said no further raises were warranted, the minutes said.

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