federal Reserve officials were concerned slow progress towards Wary about low inflation and the surprising stability of the US economy at the June meeting — so much so that some even expressed a desire to raise rates last month, rather than keep them steady, as the central bank eventually did, the minutes of the meeting showed. walked.
irrigated Officials decided to leave interest rates unchanged at their June 13-14 meeting to give them more time to see how the 10 straight hikes they made earlier are affecting the economy. Higher interest rates slow down the economy by making it more expensive to borrow and spend money, but it takes months or even years for their full effects to be seen.
At the same time, officials released an economic forecast that suggested they would make two more quarter-point rate hikes this year. The forecast was meant to send a message: Fed policymakers were slowing the pace of rate hikes by calling off the meeting. They were not stopping their onslaught against the spiraling inflation.
In the minutes of the meeting released on Wednesday, both reinforced the message that further interest rate hikes were likely and offered more details on the June debate – underscoring that Fed officials were divided on how the economy taking shape and what to do about it.
All 11 of the Fed’s polling officials supported holding the June rate, but that unanimity hid tensions beneath the surface. Some central bank officials – 18 in total, including 7 who do not vote on policy this year – were leaning toward a rate hike.
The minutes underscored what a difficult moment this is for the Fed. Inflation has eased significantly on an overall basis, but this is partly because food and fuel prices are coming down. An inflation measure that removes those volatile categories – known as core inflation – is making much headway. This has caught the attention of the Fed, especially given the signs that the broader economy is on the mend.
Since the Fed meeting, officials have continued to indicate that further rate hikes are expected. Fed Chair Jerome Powell said during an appearance last week madrid He expects the pace of interest rate hikes to remain slow — but he did not rule out that officials could return to back-to-back rate moves.
irrigated Officials decided to leave interest rates unchanged at their June 13-14 meeting to give them more time to see how the 10 straight hikes they made earlier are affecting the economy. Higher interest rates slow down the economy by making it more expensive to borrow and spend money, but it takes months or even years for their full effects to be seen.
At the same time, officials released an economic forecast that suggested they would make two more quarter-point rate hikes this year. The forecast was meant to send a message: Fed policymakers were slowing the pace of rate hikes by calling off the meeting. They were not stopping their onslaught against the spiraling inflation.
In the minutes of the meeting released on Wednesday, both reinforced the message that further interest rate hikes were likely and offered more details on the June debate – underscoring that Fed officials were divided on how the economy taking shape and what to do about it.
All 11 of the Fed’s polling officials supported holding the June rate, but that unanimity hid tensions beneath the surface. Some central bank officials – 18 in total, including 7 who do not vote on policy this year – were leaning toward a rate hike.
The minutes underscored what a difficult moment this is for the Fed. Inflation has eased significantly on an overall basis, but this is partly because food and fuel prices are coming down. An inflation measure that removes those volatile categories – known as core inflation – is making much headway. This has caught the attention of the Fed, especially given the signs that the broader economy is on the mend.
Since the Fed meeting, officials have continued to indicate that further rate hikes are expected. Fed Chair Jerome Powell said during an appearance last week madrid He expects the pace of interest rate hikes to remain slow — but he did not rule out that officials could return to back-to-back rate moves.