"Some participants commented that even though economic activity had been resilient and the labor market had remained strong, there continued to be downside risks to economic activity and upside risks to the unemployment rate," the Fed said.
Policymakers raised the target range for their benchmark rate by a quarter point at the meeting, to 5.25% to 5.5%, the highest level in 22 years. That marked a resumption of increases after they left rates unchanged at the previous gathering for the first time since early 2022.
While quarterly projections last updated in June showed most officials at the time favored two more increases in 2023, Chairman Jerome Powell emphasized after the July decision that the Fed would take things meeting by meeting.
"We intend again to keep policy restrictive until we're confident that inflation is coming down sustainably to our 2% target, and we're prepared to further tighten if that is appropriate," Mr. Powell told reporters on July 26.
Following release of the minutes, Treasury yields remained higher, while the S&P 500 index extended its losses on the day and the dollar added to its gains.
Public remarks from officials on the Federal Open Market Committee since the July meeting suggest the strong degree of consensus underpinning the aggressive tightening campaign of the last year and a half may be starting to fray.
Some, such as Philadelphia Fed President Patrick Harker, have indicated the central bank might not need to keep raising interest rates. Others, including Fed Governor Michelle Bowman, have taken the opposite view.
"A number of participants judged that, with the stance of monetary policy in restrictive territory, risks to the achievement of the committee's goals had become more two-sided, and it was important that the committee's decisions balance the risk of an inadvertent overtightening of policy against the cost of an insufficient tightening," the minutes stated.
While the FOMC's 11 voting members unanimously agreed to raise interest rates in July, the support wasn't unanimous among the broader panel of about 18 officials, as two favored leaving rates unchanged or "could have supported such a proposal," the minutes showed.