Inflation: Fed minutes hint possible interest rate hikes

April 12, 2007
Inflation: Fed minutes hint possible interest rate hikes

Wall Street had been hoping instead that the central bank might lower rates because of the slowing economy. But the minutes released Wednesday showed the Fed was remaining steadfast in its vigilance against inflation. The Fed's Open Market Committee said at its March 20-21 meeting, "all members agreed the statement should indicate that the committee's predominant policy concern remains the risk that inflation will fail to moderate as expected."

Since recent data have suggested slow economic growth and a stable job market, Wall Street's recession jitters have eased and inflation has re-emerged as a big concern.

And with energy costs heading upward, investors' hopes for a rate cut by the middle of the year have dwindled. The government on Wednesday reported a 5.5 million-barrel decline in the nation's gasoline inventories, which was four times what the market expected and the ninth straight weekly drop.