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7/6, 8:03 PM (Source: TeleTrader)
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Fed: 'More restrictive' policy possible

The Federal Reserve might turn to a "more restrictive" policy "if elevated inflation pressures were to persist," the bank's minutes from the June meeting released on Wednesday showed.

The participants agreed that the economic outlook had deteriorated and that such projections call for a "restrictive stance of policy." The document revealed that the members were firm in their belief that "the return of inflation to 2 percent" is critical in order to achieve maximum employment, even though the "policy firming could slow the pace of economic growth for a time."

The majority of the participants estimated that "the risks to the outlook for economic growth were skewed to the downside," which indicates that "a further tightening in financial conditions" could lead to bigger-than-expected negative effects on the economy.

Baha Breaking News (BBN) / AY