Fed supports more restrictive stance if high inflation persists, minutes show

The US Federal Reserve supports a more restrictive stance in its monetary policy if high inflation persists, according to minutes released Wednesday from its last meeting.

The Federal Open Market Committee (FOMC) members "concurred that the economic outlook warranted moving to a restrictive stance of policy, and they recognized the possibility that an even more restrictive stance could be appropriate if elevated inflation pressures were to persist," the minutes said from the central bank's meeting on June 14 - 15.

"In addition, such a stance would be appropriate from a risk management perspective because it would put the Committee in a better position to implement more restrictive policy if inflation came in higher than expected," it added.

The Fed increased its benchmark interest rate by 75 basis points on June 15 -- its steepest rate hike in 28 years, as annual consumer inflation soared 8.6% in May, hovering around a 40-year high.

FOMC members noted that an increase of 50 or 75 basis points would likely be appropriate at the next meeting on July 26 - 27.

Many members stressed that high inflation "could become entrenched if the public began to question the resolve of the Committee to adjust the stance of policy as warranted."/aa