The degree to which policymakers feel the Federal Reserve has finished raising interest rates and assessing the economic risks of rapid monetary tightening may be revealed in the minutes of policy meetings.

The Federal Reserve hiked its benchmark overnight interest rate at its meeting on July 25–26 to 5.25%–5.50%, which might not be the last in a string of opportunistic rate increases since March 2022.

The minutes could show how much Fed policymakers still think another rate hike is warranted or how much they think inflation will continue to fall.

The macroeconomy would be minimally affected by a quarter-point rate increase at the Fed meeting on September 19-20 or later in the year, but it would be a crucial signal to the bond and stock markets that the central bank is done raising rates and will now seek a decline.

The contradictory signals show that the Fed is worried that the policy may become overly restrictive if inflation falls and credit markets constrain lending.

The Fed may be forced to decide between accepting the risk that inflation is out of control and keeping the potential of cutting inflation without significantly increasing unemployment if market interest rates go higher.