Three Federal Reserve dissenters voice worries

Three Federal Reserve officials who dissented at this week's policy meeting in favor of an interest rate hike expressed concern Friday that without an immediate increase in shortterm borrowing costs inflation will stay stuck above the Fed's 2% target, where it has been for more than five years.

A fourth U.S. central banker said he also sees a strong case for tighter Fed policy but, with June's cooler inflation reading in hand, it may be OK to wait and assess.

The remarks are an early peek at the disagreement behind closed doors in Washington this week, when Chairman Kevin Warsh led the Fed's rate-setting committee in a 9-3 decision to leave short-term borrowing costs in the 3.50% to 3.75% range.

Longer-term bond yields surged in response, in what analysts say reflects a perceived credibility gap between Warsh's assertions that the Fed will deliver price stability and the central bank's lack of action.