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WashingtonSome members of the US Federal Reserve rate setting A committee He backed a rate hike again in June to tackle high inflation, but ultimately voted in favor of a temporary moratorium feed it announced Wed.
The Federal Open Market Committee (FOMC) voted unanimously last month to pause rate hikes after 10 consecutive hikes, giving policymakers more time to assess the impact of recent rate hikes and banking pressures on the US economy.
At the same time, FOMC members predicted that two more increases to the benchmark lending rate would likely be needed before the end of the year to bring down inflation again.
Meeting minutes released by the Fed on Wednesday show that some FOMC members went into the June 13-14 meeting in favor of another quarter-percentage-point increase to bring inflation back toward the committee’s long-term target of 2%.
The Fed minutes showed that “some participants indicated that they would prefer to raise the target range for the federal funds rate by 25 basis points at this meeting or that they could have supported such a proposal.”
Those in favor of another increase “noted that the labor market remained very tight, the momentum in economic activity was stronger than previously expected, and there were few clear signs that inflation was on its way back to the committee’s 2 percent target over time,” the Fed said.
In the end, however, all 11 voting members of the FOMC supported holding interest rates.
After last month’s announcement of a pause, Fed Chairman Jerome Powell He left the door open for successive interest rate increases in the coming months, if necessary, to cool the economy further.
“I’m not going to, you know, take the transition to back-to-back meetings ever,” he told an audience at Portugal.
Futures traders are setting a near 90 percent chance that the Fed will raise its benchmark lending rate by a quarter of a percentage point at its next meeting on July 25-26.
The minutes released on Wednesday showed that ahead of the latest meeting, Fed economists still expected the US to enter a “moderate recession” later this year, “followed by a moderate-paced recovery.”
But the Fed said strong labor market data and consumer spending mean its staff “see the potential for the economy to continue to grow slowly and avoid deflation as likely as a baseline for a moderate recession.”
The Federal Open Market Committee (FOMC) voted unanimously last month to pause rate hikes after 10 consecutive hikes, giving policymakers more time to assess the impact of recent rate hikes and banking pressures on the US economy.
At the same time, FOMC members predicted that two more increases to the benchmark lending rate would likely be needed before the end of the year to bring down inflation again.
Meeting minutes released by the Fed on Wednesday show that some FOMC members went into the June 13-14 meeting in favor of another quarter-percentage-point increase to bring inflation back toward the committee’s long-term target of 2%.
The Fed minutes showed that “some participants indicated that they would prefer to raise the target range for the federal funds rate by 25 basis points at this meeting or that they could have supported such a proposal.”
Those in favor of another increase “noted that the labor market remained very tight, the momentum in economic activity was stronger than previously expected, and there were few clear signs that inflation was on its way back to the committee’s 2 percent target over time,” the Fed said.
In the end, however, all 11 voting members of the FOMC supported holding interest rates.
After last month’s announcement of a pause, Fed Chairman Jerome Powell He left the door open for successive interest rate increases in the coming months, if necessary, to cool the economy further.
“I’m not going to, you know, take the transition to back-to-back meetings ever,” he told an audience at Portugal.
Futures traders are setting a near 90 percent chance that the Fed will raise its benchmark lending rate by a quarter of a percentage point at its next meeting on July 25-26.
The minutes released on Wednesday showed that ahead of the latest meeting, Fed economists still expected the US to enter a “moderate recession” later this year, “followed by a moderate-paced recovery.”
But the Fed said strong labor market data and consumer spending mean its staff “see the potential for the economy to continue to grow slowly and avoid deflation as likely as a baseline for a moderate recession.”
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