Overheating Risks
Officials also discussed risks of inflation, with “a number” of them saying it was “premature to conclude that the committee had achieved” its 2 percent inflation target on a sustainable basis. Others voiced the concern that “a prolonged period in which the economy operated beyond potential could give rise to heightened inflationary pressures or to financial imbalances that could lead eventually to a significant economic downturn.”
Political and economic turmoil in some parts of Europe and emerging-market economies were also cited as a downside risk to growth and inflation by “many” Fed officials.
Most analyst projections show economic growth accelerated in the second quarter after a 2 percent annualized pace in the first three months of the year.
The Atlanta Fed’s GDPNow tracker put the rate of expansion last quarter at 4.1 percent, while the median estimate of economists surveyed by Bloomberg is for 2.9 percent for the full year. Many economists expect growth to cool starting in the current quarter from its pace in the April-June period.
This article was provided by Bloomberg News.