With the future path of the US economy “highly uncertain”, policymakers at the <a href="https://www.thenationalnews.com/tags/federal-reserve/" target="_blank">Federal Reserve</a> acknowledged that it must proceed with caution in future interest rate decisions, according to minutes released on Wednesday. Faced with this economic uncertainty and some evidence of inflation moderating, the Fed held its benchmark rate range at <a href="https://www.thenationalnews.com/business/economy/2023/09/20/fed-interest-rate-pause/" target="_blank">5.25 per cent to 5.50 per cent</a> at the conclusion of its September 19-20 meeting. Participants acknowledged some signs of disinflation, however they also said that more evidence was needed for them to be confident that <a href="https://www.thenationalnews.com/business/economy/2023/09/29/pce-inflation-august-2023/" target="_blank">inflation</a> was “clearly on a path” to the Fed's 2 per cent target. Several officials also suggested that the conversation on interest rates should “shift” from how high to raise them to how long to keep them elevated for. A majority of the 19 participants expect one more quarter-rate increase this year. Economic projections also point to fewer rate cuts next year. “All participants agreed that policy should remain restrictive for some time until the committee is confident that inflation is moving down sustainably toward its objective,” the minutes read. Participants were also unanimous in their belief that the Fed “was in a position to proceed carefully”. Officials also displayed greater concern that restricting policy too much could restrain the economy more than expected, resulting in higher unemployment. The minutes came as Fed officials spoke on soaring <a href="https://www.thenationalnews.com/business/economy/2023/10/09/fed-in-sensitive-period-as-it-considers-interest-rates-official-says/" target="_blank">Treasury yields</a> leading to higher borrowing costs, which may negate the need for another rate increase. Headline inflation has dropped considerably since last year. The Fed's preferred metric showed inflation rose 3.5 per cent year-on-year last month. Core inflation – which excludes food and energy – climbed down to a two-year low of 3.9 per cent. Economic growth has also been stronger than expected, leading Fed officials to revise their yearly growth projections from 1.0 per cent to 2.1 per cent. Minutes released on Wednesday also showed the US <a href="https://www.thenationalnews.com/business/economy/2023/07/28/us-economy-growth-interest-rate/" target="_blank">gross domestic product</a> was growing at a solid pace in the third quarter. But many participants viewed the “future path of the economy as highly uncertain”. The issue that appeared to weigh most on officials' minds was the ongoing car workers strike. A prolonged and intensified strike by the <a href="https://www.thenationalnews.com/world/us-news/2023/09/15/uaw-strike-what-are-the-aims-and-what-does-it-mean/" target="_blank">United Auto Workers</a> union against Detroit's “Big Three” car makers poses an upside risk to inflation and could constrain economic activity. Other risks participants pointed to were rising oil prices, potential strains in the US banking sector and the threat of a government shutdown. A slowdown of China's economy could also decelerate global economic growth. The <a href="https://www.thenationalnews.com/business/economy/2023/10/11/us-is-monitoring-economic-impact-of-israel-gaza-war-yellen-says/" target="_blank">Israel-Gaza war</a> is also likely to add to this economic uncertainty, although Treasury Secretary Janet Yellen does not believe the conflict will have a significant impact, though she said the US is monitoring the situation.