Most US central bankers viewed inflation as stable, but some are becoming more vocal about fears the Covid-19 pandemic will push prices higher, according to minutes of last month's Federal Reserve meeting released on Wednesday.
Fed officials also expressed concern the pandemic was constraining the American labor force.
The policy-setting Federal Open Market Committee (FOMC) took no major action at the March 16-17 meeting, keeping its benchmark lending rate at zero to help the economy recover from the business disruptions and mass layoffs caused by Covid-19.
While warning the recovery was incomplete, Fed Chair Jerome Powell acknowledged the rebound has been faster than expected thanks to relief measures approved by Congress, including the $1.9 trillion American Rescue Plan enacted last month.
However, the massive spending has raised fears inflation will increase as the world's largest economy reopens, which sparked a selloff in bonds and some rocky trading sessions on Wall Street.
The FOMC meeting minutes showed most central bankers saw inflation as under control, with the risks "broadly balanced," but there was a split on the fear prices could spike.
"Several remarked that supply disruptions and strong demand could push up price inflation more than anticipated," the minutes said.
But, "Several participants commented that the factors that had contributed to low inflation during the previous expansion could again exert more downward pressure on inflation than expected."
Meanwhile, despite the strengthening recovery, FOMC members warned that "the path ahead remained highly uncertain, with the pandemic continuing to pose considerable risks to the outlook."
In particular, they raised concerns about the labor force participation rate, a measure of the economy's active workforce, which in February was at 61.4 percent.
Though it has recovered from the lowest point of the pandemic, it is near levels not seen since the mid-1970s.
Some committee members worried "labor force participation continued to be held down by workers' health concerns and additional childcare responsibilities associated with virtual schooling," and would not improve until those are addressed.
In the March employment data released last week, the labor force participation rate posted a miniscule increase to 61.5 percent compared to 63.4 percent in January 2020.