The headquarters of the Federal Reserve in Washington, D.C., in 2015. (AP Photo/Andrew Harnik)
August 17, 2016
Some Federal Reserve policymakers said at their most recent meeting that the economy appeared ready for another small increase in a key interest rate, according to an account released Wednesday.
But several other officials said the Fed should wait before nudging up the rate until incoming data “provided a greater level of confidence that economic growth was strong enough to withstand a possible downward shock to demand,” said the minutes of the central bank’s July meeting.
Policymakers voted, 9-1, at the meeting to hold the benchmark federal funds rate steady at between 0.25% and 0.5%.
But the minutes indicated that a rate hike will be on the table at the Fed’s next monetary policy gathering Sept. 20-21.
Esther George, president of the Federal Reserve Bank of Kansas City, cast the only vote against holding the rate steady in July. She believed a 0.25-percentage-point hike “was appropriate” because of “solid employment growth,” continued economic growth and signs that inflation was trending toward the Fed’s annual 2% target, according to the statement issued after the meeting.
But the minutes showed that she wasn’t the only member of the policymaking Federal Open Market Committee who favored a rate hike then or in the coming weeks. The minutes said “some” Fed policymakers disagreed with waiting for more economic data.
“Given their economic outlook, they judged that another increase in the federal funds rate was or would soon be warranted, with a couple of them advocating an increase at this meeting,” according to the minutes.
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