By Jeannine Aversa, AP Economics Writer
WASHINGTON (AP) — Federal Reserve officials raised concerns last month that a big jump in energy prices could weaken the economy and unleash inflation, prompting a few to suggest the possibility of tightening credit this year.
Such a move usually involves boosting interest rates, although the minutes from the Fed's closed-door meeting on March 15 did not specify that. The minutes, which were released Tuesday, also did not note which members raised the prospect of a change in policy, or how many.
It simply stated that a "few members" raised that possibility. Those members appeared to be in the minority.
Another group of Fed members, presumably the majority, said the Fed might need to keep holding interest rates at record low levels beyond this year.
The differing viewpoints about potential future policy actions highlight a growing number of challenges facing the economy, which all the members agreed was improving.
At last month's meeting, the Fed offered its most optimistic assessment of the economy since the recession. Fed policymakers said the recovery was finally on "firmer footing." Companies had stepped up hiring and both consumers and businesses were spending more.The Fed decided to maintain the pace of its $600 billion Treasury bond-purchase program to help the economy grow at a faster pace and to help lower unemployment. It also left its key interest rate at a record low near zero, where it has been since December 2008.
Those decisions were unanimous.
Still, the minutes noted that Fed members discussed possible pitfalls, both at home and abroad.
All the members seemed to agree that widespread disruptions in oil production and a larger jump in energy prices could weaken the economy and spur inflation.
The Fed ultimately agreed with the view stated publicly by Fed Chairman Ben Bernanke, that the run-up in oil prices would have only a modest impact on consumer prices.