Almost all Fed members see future rate hikes amid 'unacceptably high' inflation
By Yasin Ebrahim
Investing.com — «Almost all» Federal Reserve policymakers backed rate hikes to resume following a pause at the June meeting, expressing concern about the strength in the labor market and «unacceptably high» elevated inflation, according to the Fed minutes of its Jun. 13-14 meeting showed on Wednesday.
«Almost all participants noted that in their economic projections that they judged that additional increases in the target federal funds rate during 2023 would be appropriate,» the Fed minutes showed.
In the weeks that followed the June meeting, Fed Chairman Jerome Powell bolstered expectations for the Fed to resume hiking, insisting that monetary policy wasn’t restrictive enough and said he wouldn’t rule out the possibility of hiking rates at consecutive meetings.
The Fed has stressed the importance of allowing the pace of tightening seen so far to filter through the economy and curb inflation, but several Fed members touted «the possibility that much of the effect of past monetary policy tightening may have already been realized,» the minutes showed, signaling the need for further rate hikes.
At the conclusion of its previous meeting on Jun. 14, the Federal Open Market Committee kept its benchmark rate in a range to a range of 5% to 5.25%.
But there were some Fed members, according to the Fed minutes, who were in favor of a rate hike at the June meeting, amid concerns about a «very tight» labor market and momentum in the economy.
At the meeting, Fed members upgraded their rate-hike forecast, estimating a terminal rate, or peak rate, of 5.6% at the midpoint in 2023, up from a prior forecast of 5.1% seen in March, suggesting two more hikes ahead.
The core personal consumption expenditures price index,
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