US central bankers last month flagged the concern that sky-high inflation could become a permanent fixture, and stressed their readiness to continue raising interest rates to tamp down price pressures, according to the minutes of the latest policy meeting released Wednesday.

The Federal Reserve last month implemented the most aggressive interest rate increase in nearly 30 years, as policymakers cited worries that price pressures had shown no signs of easing, according to the record of the June 14-15 meeting.

The members of the Fed's policy-setting Federal Open Market Committee raised the benchmark borrowing rate three-quarters of a point and at the time said another similar increase was possible later this month, after data showing consumer prices surged 8.6 percent in the 12 months to May -- the highest in more than four decades.

Officials were concerned "that inflation pressures had yet to show signs of abating," further evidence "inflation would be more persistent than they had previously anticipated," the minutes said.

Many policymakers said there was "a significant risk... that elevated inflation could become entrenched if the public began to question the resolve of the Committee."

But the minutes made clear the officials don't plan to let up in their efforts to cool the economy, at least through the end of the year.

With the high prices for food, energy, housing and other goods squeezing American families, Fed officials stressed the moves were "essential in restoring price stability."

Still, there remains a risk inflation will continue to accelerate amid the uncertainty surrounding how long the Russian invasion of Ukraine and Covid-19 lockdowns in China will continue to exacerbate price pressures, the report said.

Officials acknowledged they might have to be even more aggressive in tightening monetary policy "if elevated inflation pressures were to persist."

However, economists note that more recent data and surveys show price pressures easing and housing demand slowing, while even job openings in the red-hot US labor market dipped.

"Not sure people realize how dramatically the runaway inflation narrative has now collapsed," Nobel-prize winning economist and columnist Paul Krugman said on Twitter.

The Federal Reserve implemented the most aggressive interest rate increase in nearly 30 years, as policymakers cited worries that price pressures had shown no signs of easing
The Federal Reserve implemented the most aggressive interest rate increase in nearly 30 years, as policymakers cited worries that price pressures had shown no signs of easing AFP / Stefani Reynolds

He said retail gasoline prices have not reflected the cooling at the wholesale level.

Oil prices have retreated for the past two days, with the US benchmark WTI below $100 for the first time in about two months.

But, he tweeted, "a lot of economic commentators have been waiting years for the chance to posture sternly against runaway inflation, and really, really won't want to back down."

Ian Shepherdson of Pantheon Macroeconomics also noted that while the minutes point to an economy still expanding, that "growth picture is way out of date" as recent figures show second-quarter GDP likely fell again.

The Fed's super-sized rate hike last month came with the central bank under intense pressure to curb soaring prices that have left millions of Americans struggling to make ends meet and sent President Joe Biden's approval ratings plunging.

Following the meeting, Fed Chair Jerome Powell said it was "essential" to lower inflation, but stressed that the goal is to achieve that without derailing the US economy.

The minutes confirmed the feeling another hike of 50 or 75 basis points is likely this month, but Shepherdson noted that officials said they would be "nimble" in the face of new data.

"In other words, 75bp is not a done deal. We very much hope that the sobering data since the June meeting will push members towards the smaller hike," he said.

US central bankers began raising interest rates off zero in March as buoyant demand from American consumers for homes, cars and other goods clashed with transportation and supply chain snarls.

Inflation got dramatically worse after Russia invaded Ukraine in late February, and US gasoline prices topped $5.00 a gallon for the first time, though they have since retreated slightly.

The Fed minutes said inflation risks remain "skewed to the upside."