NEW YORK—The Federal Reserve could pause its monetary policy tightening in September if there is an economic deterioration and inflation subsides, Bank of America (BofA) strategists said on Thursday, a day after the U.S. central bank released the minutes from its May policy meeting.
All of the Fed’s policymakers agreed to hike interest rates by half a percentage point at the May 3–4 policy meeting to counter rampant inflation and most participants said further hikes of that magnitude in June and July could be appropriate.
But the minutes also showed the Fed grappling with how best to reduce inflation without causing a recession or pushing the unemployment rate substantially higher—a task that several participants said would prove challenging….