Fed policymakers' inflation concerns increased at July meeting, minutes show
Minutes showed many Fed officials saw another rate hike as likely if inflation does not return to 2% target.
- On Wednesday, minutes from the July 28-29 meeting showed Federal Open Market Committee officials voted 9-3 to hold the federal funds rate at 3.5%-3.75%, citing persistent inflation concerns well above the 2 percent target.
- Many participants assessed that policy tightening would be necessary if inflation does not decline, with policymakers remarking that "price pressures appeared broad-based" and judging a more restrictive stance essential to meet stability goals.
- Three regional presidents—Beth Hammack of Cleveland, Lorie Logan of Dallas, and Neel Kashkari of Minneapolis—dissented, arguing a rate increase would "forestall the need for a steeper and potentially more costly sequence of tightening moves."
- Federal Reserve Board Chairman Kevin Warsh asked for "input from the Committee" on reducing annual meetings from eight to six, while maintaining his preference for providing less forward guidance to preserve policy flexibility.
- Investors are pricing in rate hikes to begin as soon as the October 27-28 meeting, though renewed hostilities in the Middle East have constrained oil shipments, complicating the central bank's inflation-fighting path.
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Fed members find it necessary to raise interest rates if inflation does not drop by 3% soon, as shown by the minutes of the July meeting.
Latest Federal Reserve minutes show more support for rate hikes as inflation fears mount
Concern about inflation deepened at the Federal Reserve's meeting last month, with "several" policymakers ready to raise interest rates and "many" saying a hike in borrowing costs would be needed if inflation does not decline to the central bank's 2% target, the minutes of the session showed on Wednesday.
Many US Fed policymakers back interest rate hikes if inflation stays high
Three of the 12 voting members of the Federal Open Market Committee (FOMC) dissented from the majority decision to hold rates steady last month, calling for an immediate 25-basis-point hike. Minutes of the meeting, released after a routine three-week lag, showed that "many" of their peers "assessed that policy tightening would likely be necessary if inflation did not decline." The Federal Reserve has missed its long-term two-percent inflation t…
The Fomc discussed, in the minutes of the meeting of 28-29 July recently diffused, two distinct risks related to artificial intelligence. The first concerns inflation. Some participants considered that the...
The Federal Open Market Committee (Fomc) of the Federal Reserve (Fed) considered, at last month's meeting, that the prospects for inflation were highly uncertain and that the risks were tilted upwards. On the other hand, the general assessment of the members of the committee was that the American labour market was stable and that the conditions would remain so in the near future. Exclusive material for subscribers. To have full access, access th…
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