Fed sees upside risks to inflation, leaves door open for more rate hikes

ISTANBUL

US Federal Reserve officials see upside risks to high inflation, leaving the door open for more rate hikes, according to minutes from a two-day meeting at the end of June.

"Participants cited upside risks to inflation, including those associated with scenarios in which recent supply chain improvements and favorable commodity price trends did not continue or in which aggregate demand failed to slow by an amount sufficient to restore price stability over time, possibly leading to more persistent elevated inflation or an unanchoring of inflation expectations," according to the minutes that were released late Wednesday.

The Fed raised its benchmark interest rate by 25 basis points July 26, raising the target range for the federal funds rate to between 5.25% and 5.5% -- the highest in more than 22 years.

Consumer inflation in the US rose 9.1% annually in June, the largest 12-month increase since November 1981. With the Fed's aggressive monetary tightening and rapid interest rate increases, consumer inflation eased to 3% in June but rose to 3.2% in July.