• Even before U.S. inflation data on Wednesday came in hotter than expected, Federal Reserve officials had begun worrying last month that progress might have stalled and a longer period of tight monetary policy could be needed to tame the pace of price increases.
  • “Some” officials at the Fed’s March 19-20 meeting even raised the possibility that the current 5.25%-5.50% policy rate was “less restrictive than desired, which could add momentum to aggregate demand and put upward pressure on inflation,” according to minutes of the meeting released on Wednesday, the sort of logic that could be used to defend another rate hike.
  • Projections issued at that meeting showed no policymakers had penciled in a higher policy rate, and the two-day session took place in the context of record high stock prices and falling market interest rates.