Directors at one of the Federal Reserve’s 12 regional banks sought to raise the discount rate in September, while the other outposts favored the decision to hold it.
(Bloomberg) — Directors at one of the Federal Reserve’s 12 regional banks sought to raise the discount rate in September, while the other outposts favored the decision to hold it.
Minutes of discount-rate meetings released by the Fed Tuesday showed that directors at the Cleveland Fed board supported a 25 basis-point increase.
Fed officials unanimously opted to hold their benchmark federal funds rate last month in a target range of 5.25% to 5.5%, the highest level in 22 years. The Fed also left the discount rate, which governs the cost of borrowing by banks at its backstop lending facility, at 5.5%.
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.
The requests also shed more light on underlying positions detailed in minutes from the Fed’s Sept. 19-20 policy meeting released last week.
Those showed that “a majority” of Fed officials saw one more rate increase “would likely be appropriate” to help cool off demand and get inflation closer to their 2% inflation target over the next two years, while “some” said “no further increases would be warranted.”
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