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Federal Reserve officials indicate that interest rates may rise in the coming months if inflation remains high.

Federal Reserve officials indicated in the minutes of their July 28-29 meeting that they would likely need to increase the key short-term interest rate if inflation does not continue to subside. While the committee voted 9-3 to keep the rate unchanged at approximately 3.6%, many participants expressed concern over stubbornly elevated inflation risks. Kevin Warsh, the Federal Reserve chair, has shown a patient approach toward rate hikes, which has contributed to rising yields on longer-term Treasury securities. To counter these rising borrowing costs, the Treasury Department announced it would buy back more longer-term Treasury bonds to stabilize the economy. The minutes also revealed that the committee discussed potentially reducing the FOMC meeting schedule from eight times per year to six. This change would allow more time for economic data to accumulate between meetings. Additionally, the officials addressed a disruption in transaction settlements, noting that the Fed's policy of maintaining ample bank reserves helped maintain market order.

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