Report: Federal Reserve Officials May Raise Interest Rates Higher

Federal Reserve officials concluded last month that higher interest rates could still be needed even as they removed a reference in their policy statement to tighter credit.

"Further policy firming might prove necessary to foster lower inflation," the Fed said in minutes of the Open Market Committee's March 20–21 meeting, released yesterday in Washington. "But in light of the increased uncertainty about the outlook for both growth and inflation, the committee also agreed that the statement should no longer cite only the possibility of further firming."

The minutes contained no hint of a rate cut, which some economists forecast, and suggested that policy makers remained confident that their prediction of an economic rebound would be borne out. Stocks fell and yields on Treasury notes rose.