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That, they feared, would erode the Fed's credibility and heighten inflation expectations.
It is damaging not only because it reduces the value of aid by 15-20% [ 6], but it can also increase fiscal and monetary instability in recipient countries, which can heighten inflation [ 7].
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The committee, accordingly, continues to see a risk of heightened inflation pressures.
Since then, new data have heightened inflation worries and seemed to validate the bank's hawkish views.
Those efforts to liberalize the economy spurred industrial growth and foreign investment, but they also resulted in rising budget and trade deficits and heightened inflation.
"They are preparing the ground to be the first central bank to take action against the heightened inflation risk," he said.
Nonetheless, the panel said, "the risks continue to be weighted mainly toward conditions that may generate heightened inflation pressures in the foreseeable future".
This has heightened inflation pressure across Europe and could force the European Central Bank to raise interest rates enough to slow the European economy.
Members unanimously agreed that future risks to the economy were "weighted mainly toward conditions that may generate heightened inflation pressures in the foreseeable future".
Nonetheless, it continued, "the risks continue to be weighted mainly toward conditions that may generate heightened inflation pressures in the foreseeable future".
The Fed could underline that message with a statement that "the risks are weighted mainly toward conditions that may generate heightened inflation pressures in the foreseeable future".
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com