Fed minutes show some members backed an additional hike heading into the previous FOMC meeting
Fed Chair Jerome Powell AFP

Federal Reserve officials believe that the current level of interest rates, the highest in 22 years, is still going to weigh on economic activity, hiring and inflation, although the impacts are "uncertain."

They agreed to proceed "carefully" when they decided unanimously to maintain the U.S. key interest rate unchanged in the range of 5.25% to 5.5%, according to the minutes of the Federal Open Market Committee meeting on Oct. 31 and Nov. 1.

"Participants judged that maintaining this restrictive stance of policy at this meeting would support further progress toward the Committee's goals while allowing more time to gather additional information to evaluate this progress," the minutes said.

The document says that "current inflation remained unacceptably high" and that members of the FOMC "stressed that further evidence would be required for them to be confident that inflation was clearly on a path to the Committee's 2% objective."

They also noted that more increases would be appropriate if upcoming data show that progress in fighting inflation isn't sufficient.

According to the minutes, there was no discussion about reducing rates.

Annual inflation in the U.S. slowed in October to the lowest level since July and more than economists expected after gasoline prices fell. The consumer price index rose 3.2% in October from a year earlier and was unchanged from September, the Labor Department said last week. The core index, which excludes food and energy items, increased 0.2% monthly and 4% annually.

The current U.S. interest rate is the highest in 22 years. The Fed started the tightening cycle in March 2022, when the rate was in the range of 0% to 0.25%. Since then, there have been 11 increases. The next Fed decision is scheduled for Dec. 13.