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The Federal Reserve is still committing to raising interest rates. The market’s fear is that the Fed will go too far and may cross well above a “neutral” threshold in its rate-hiking ambitions. The minutes from the Federal Open Market Committee (FOMC) meeting at the end of September are pointing further toward the growing fears.

Wednesday’s release of the FOMC minutes from the September meeting are coming out at effectively the same time that President Trump has been publicly critical of the Fed’s continued tightening of interest rates.

Federal Reserve officials have expressed some concerns over the risks pertaining to the Trump administration’s international trading policy. Those Fed officials who were concerned referenced regional business reports that have cited that uncertainty as holding back production. This all falls in the wake of the highly publicized tariffs on billions of dollars worth of imports.

While interest rates are expected to keep rising, there is another view that Fed officials seem split about the actual path of interest rate hikes. A few Fed officials have voiced that it may be necessary to temporarily raise the federal funds rates above their longer-run level. Others have expressed that hiking above the neutral rate is not necessary without clear signs of the economy overheating and without rising inflation.

Real gross domestic product was projected by the FOMC to increase in the second half of this year at a rate that was just a little slower than in the first half of the year. At the same time, the unemployment rate was projected to decline further below the staff’s estimate of its longer-run natural rate of unemployment. The FOMC comments went to say:

The staff continued to anticipate that supply constraints might restrain output growth somewhat in the medium term. The unemployment rate was projected to be a little lower over the medium term than in the previous forecast, partly in response to the staff’s assessment that the natural rate of unemployment was a bit lower than previously assumed. With labor market conditions already tight, the staff continued to assume that projected employment gains would manifest in smaller-than-usual downward pressure on the unemployment rate and in larger-than-usual upward pressure on the labor force participation rate.

When the public sees Fed officials use terminology such as “modestly restrictive for a time” and “firming” of inflationary pressures, the markets have a reason to worry. Fed officials have historically struggled to find what should be an equilibrium in interest rates. That’s the nature of the big game.

As a reminder, the Fed’s former target was for 2% inflation and what they deem as full employment. Those may be the two official mandates, but there are multiple others that are the best unkept secrets, such as market stability and outside economies.

Federal Reserve Chair Jerome Powell recently maintained that interest rates are likely to keep rising, but he also indicated that there is not an assured acceleration in inflation being imminent.

Wednesday’s minutes should keep uncertainty in the air. The Dow Jones industrials were down 90 points at 25,708 and the S&P 500 was down almost three points at 2,807 in the final hour of trading on Wednesday. That said, those slight drops were on the heels of massive gains on Tuesday.

The yield on the 10-year Treasury note was up two basis points at 3.18% late on Wednesday. It was just on October 9 that the 10-year yield reached a peak of 3.24%.

See a more detailed review in the full FOMC minutes.