Hawkish Fed signals it may have to raise rates sooner to fight inflation

The language showed the depth of the consensus that has emerged at the Fed in recent weeks over the need to move against high inflation - not just by raising borrowing costs but by acting with a second lever and reducing the central bank's holdings of Treasury bonds and mortgage-backed securities.

WASHINGTON: A "very tight" job market and unabated inflation might require the Federal Reserve to raise interest rates sooner than expected and begin reducing its overall asset holdings as a second brake on the economy, U.S. central bank policymakers said in their meeting last month.

In a document released on Wednesday that markets took as decidedly hawkish, the minutes from the Dec. 14-15 policy meeting showed Fed officials uniformly concerned about the pace of price increases that promised to persist, alongside global supply bottlenecks "well into" 2022.