The Federal Reserve expressed concern about both greater inflation risks and a slowdown in the economy that could extend into next year, according to minutes of its most recent meeting.The central bank said it is most likely that its next move will be to raise interest rates. The Fed indicated that the timing of such a move is uncertain, however, given the conflicting pressures on the Fed to both spur economic growth and keep prices in check.
But since that meeting, expectations of a rate hike in the next few months have dipped significantly as oil prices have fallen and the dollar has rallied.
In addition, the Fed also indicated in the minutes that its staff lowered its forecast for economic growth in the second half of this year and into 2009. The Fed is now looking for a pickup in the economy in the second half of next year.
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