Federal Reserve officials have been surprised at the pace of inflation and indicated at their last meeting that they expect higher interest rates to remain in place until prices come down, according to minutes released Wednesday from the central bank's September meeting.

In discussions leading up to a 0.75 percentage point rate hike, policymakers noted that inflation is especially taking its toll on lower-income Americans.

They reiterated rate hikes are likely to continue and higher rates prevail until the problem is showing signs of resolving.

"Participants judged that the Committee needed to move to, and then maintain, a more restrictive policy stance in order to meet the Committee's legislative mandate to promote maximum employment and price stability," the meeting summary stated.

Officials further noted that with inflation "showing little sign so far of abating … they had raised their assessment of the path of the federal funds rate that would likely be needed to achieve the Committee's goals."

The S&P 500 was little changed on Wednesday after the release of the minutes, stuck near its lowest level of the year as traders saw little evidence that a pivot to a softer monetary stance was on the horizon.

"Several participants underlined the need to maintain a restrictive stance for as long as necessary, with a couple of these participants stressing that historical experience demonstrated the danger of prematurely ending periods of tight monetary policy designed to bring down inflation," the minutes stated.

The meeting happened ahead of a recent flow of data showing that inflation pressures do remain elevated, though not at the pace they were earlier this year. The Fed's preferred inflation gauge of consumer price expenditures rose 6.2% from a year ago – 4.9% excluding food and energy – in August, according to data last week that was well above the central bank's 2% target.

A report Wednesday showed producer prices rose 0.4% in September.

"Participants observed that inflation remained unacceptably high and well above the Committee's longer-run goal of 2 percent," the minutes said. "Participants commented that recent inflation data generally had come in above expectations and that, correspondingly, inflation was declining more slowly than they had previously been anticipating."

Members of the rate-setting Federal Open Market Committee noted at the meeting that the economy needs to slow to get inflation to cool. They lowered their projections for the economy, expecting GDP to grow at just a 0.2% annualized pace in 2022 and just 1.2% in 2023, well below trend and big drop from 2021, which saw the strongest gains since 1984.

They said inflation was being driven by supply chain problems that were not limited to goods but also stressed to a shortage of labor.

However, officials also expressed optimism that policy would help loosen the labor market and bring down prices. Officials have said lately they don't expect rates to stay high until inflation comes all the way down to 2%.

"Participants judged that inflation pressures would gradually recede in coming years," the summary said.

The meeting concluded with the FOMC approving its third consecutive 0.75 percentage point increase, taking benchmark rates to a range of 3%-3.25%. Markets widely expect a similar-size increase to be approved at the next meeting in early November.

Officials did note that they see a point coming when the pace of rate hikes at least will decelerate, though they did not put a time frame on when that will happen.

The minutes said FOMC members noted it "would become appropriate at some point to slow the pace of policy rate increases while assessing the effects of cumulative policy adjustments on economic activity and inflation."

They said that time would come after the fed funds rate had "reached a sufficiently restrictive level," after which "it likely would be appropriate to maintain that level for some time until there was compelling evidence that inflation was on course to return to the 2 percent objective."

The summary of economic projections at the meeting pointed to a "terminal rate," or end point of rate increases to be around 4.6%. Markets expect the Fed to hike into early 2023 then keep rates there through the year.