Directors at two of the Federal Reserve’s 12 regional banks sought to hold the discount rate unchanged in July, while the other outposts favored the decision to raise it by 25 basis points.
(Bloomberg) — Directors at two of the Federal Reserve’s 12 regional banks sought to hold the discount rate unchanged in July, while the other outposts favored the decision to raise it by 25 basis points.
Minutes of discount-rate meetings released by the Fed Tuesday showed that directors at the New York and Atlanta boards supported a hold.
Fed officials unanimously raised their benchmark federal funds rate last month to a target range of 5.25% to 5.5%, the highest level in 22 years.
The requests by the regional boards don’t necessarily mean the leaders of those banks supported that position, but the policy views of bank presidents often align with the banks’ directors.
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The requests also shed more light on underlying divisions detailed in minutes from the Fed’s July 25-26 policy meeting released last week. Those showed that officials largely remained concerned that inflation would fail to recede and that further interest-rate increases would be needed. At the same time, cracks in that consensus were also becoming more apparent.
Two Fed officials favored leaving rates unchanged or “could have supported such a proposal,” instead of the rate hike the Federal Open Market Committee ultimately authorized at the conclusion of the meeting, the minutes showed.
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