As a result, it could require more rate hikes in the future to get inflation down. That could happen if people become accustomed to higher inflation, leading businesses to continue to raise prices. Officials raised concerns that leaving rates unchanged at a time when inflation was above their target could result in persistently high inflation. Ultimately, the Fed held off on hiking rates again until 2015, when officials felt the economy had significantly recovered from the Great Recession. That’s why officials stressed the importance of keeping a line in their September meeting’s policy statement explaining their decision to maintain the pause - and leaving the door open to potentially more rate hikes. Nevertheless, they generally agreed that they wouldn’t shy away from hiking rates again if inflation started to heat up once more. Officials also warned that given the time it takes for the effects of rate hikes to be felt across the economy, they could end up overtightening. “In fact, if we did move today, it would be a signal that we are just reacting to little snippets of information, and we are trying to dissuade people from thinking that,” he added. “We told the public that we paused to assess incoming data, and I think it requires more than one meeting’s worth of data to assess that,” Michael Moskow, the former Chicago Fed president, said at the Fed’s August 2006 meeting, according to an archived Fed transcript. When the Fed met again in September, many officials expressed concerns that raising interest rates after a short, six-week pause would broadcast the wrong message. The Fed’s initial decision to stop raising rates further came in August 2006 after June’s quarter-point hike.
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