Fed policymakers say slowing economy to ease inflationary pressures

Fed policymakers say slowing economy to ease inflationary pressures

WASHINGTON, Oct. 11 (Xinhua) -- Most policymakers at the U.S. Federal Reserve (Fed), when they met Sept. 20, said inflationary pressures would eventually ease as the economy slowed down, according to minutes of the meeting released Wednesday.

At the Sept. 20 meeting, the central bank's policymakers decided to keep the federal funds rate, the interest that commercial banks charge each other on overnight loans, unchanged at 5.25 percent.

Some softer indicators of economic activity and slightly lower readings on core inflation "pointed to a modestly better inflation outlook and hence made the policy decision today somewhat less difficult than it was in August, when it was seen as a particularly close call," the minutes said.

The decision made at the September meeting marked the second consecutive time the policymakers left interest rates alone.

The minutes said "many meeting participants emphasized that they continued to be quite concerned about the outlook for inflation."

But most of them said that the slowing economy and falling energy costs would eventually reduce inflationary pressures.

Fed policymakers also said a "significantly more sluggish performance than anticipated could not be entirely ruled out," according to the minutes.

The U.S. economy grew by an annual rate of 2.6 percent in the second quarter, compared with a brisk 5.6 percent in the first three months of this year.

Policymakers at the Fed are scheduled to meet again on Oct. 24- 25. They are expected by many economists to leave interest rates unchanged for the third straight time.

Source: Xinhua