Fed Kept Options Open at Meeting

Federal Reserve policymakers opted to raise interest rates at their Aug. 24 meeting to keep the U.S. economy from overheating and did not rule out further increases should inflation pick up, according to minutes of the meeting issued Thursday.

Members of the central bank’s Federal Open Market Committee voted 9 to 1 to raise the federal funds rate and the discount rate by a quarter-percentage point each. They also decided to maintain a so-called symmetrical stance on future policy moves in a desire to keep their options open.

The president of the Dallas Fed, Robert McTeer, dissented on the vote as he did at the committee’s June 29-30 meeting, which also resulted in a quarter-percentage-point rate rise and a neutral outlook for the future. McTeer again cited low inflation and strong productivity gains, the minutes said.

The Fed, which at its meeting this week decided to leave key rates unchanged, saw few signs of a pickup in inflation in August despite what it described as “substantial underlying strength” in the U.S. economy.