Federal Reserve officials raised concerns over inflation during their recent meeting. They said that they were willing to hike interest rates in the event of rising prices.

On Wednesday, the Fed’s interest rate setting committee released minutes of the November session in which it indicated that it might be reducing the amount it provided during the pandemic.

Summary of the meeting indicates lively discussions about inflation. Members stress their willingness to take action if things heat up.

According to minutes, “Various participants pointed out that the Committee ought to be ready to accelerate asset purchases and increase the target range of the federal funds rates sooner than the participants anticipate if inflation persists above levels consistent with its objectives.”

Officials encouraged a “patient approach” to the incoming data. The result has been inflation at its highest point in 30 years.

They also stated that they will “not hesitate” to respond to inflation pressures that could pose risks for its long-term price stability and employment goals.

After the Nov. 3 session, the Federal Open Market Committee stated that they will be reducing the amount of monthly bond buying that saw it purchase $120 billion worth Treasurys and mortgage backed securities.

It was designed to preserve money flows in the markets, while keeping interest rates low enough to encourage economic activity.

The FOMC stated that “substantial additional progress” would enable a $15 billion per month decrease in purchasing — $10 billion in Treasurys, $5 billion MBS. The statement said that schedule would be maintained through at least December and probably continue going forward until the program wound down – likely by late spring or early summer 2022.

Minutes revealed that FOMC members desired a faster pace in order to allow the Fed to increase rates earlier.

The minutes stated that some participants thought that it would make sense to reduce the monthly pace of net asset purchase by over $15 billion per month to allow the Committee to adjust the Federal Funds Rate target range, especially in the light of rising inflation.

Because inflation has increased since the November meeting, this is crucial. Officials have stated that they will allow inflation to rise faster than usual in order to improve the employment situation.

However, markets are expecting a Fed that is more aggressive.

Contract traders that place bets on the future rate of short-term interest rates believe the Fed will increase its benchmark rate by three times per year in 2022 at 25 basis point intervals. But, current projections do not show any more than one rise next year. These markets can be volatile, and could change rapidly depending on what signals are sent by the Fed.

FOMC members voiced concern that continued high inflation readings may influence public perceptions. They also expressed concerns about “emotions becoming less well anchored to” the Fed’s longer-term 2% goal.