Almost all Fed officials favour future hikes
«Almost all participants judged it appropriate or acceptable to maintain the target range for the federal funds rate at 5% to 5.25%,» minutes from the June 13-14 meeting said. «Some participants indicated that they favoured raising the target range for the federal funds rate 25 basis points at this meeting or that they could have supported such a proposal.» Officials supporting a hike cited tight labour markets and relatively few signs that inflation was slowing toward the 2% goal.
The minutes shed light on how tricky the decision was for policymakers to achieve. Even as they left rates unchanged, almost all officials said that additional increases would likely be appropriate, with most emphasizing that post-meeting communications would be essential to convey that message.
The readout provides more clarity to Fed watchers, who were perplexed by the decision to leave rates unchanged in a 5% to 5.25% target range, while at the same time forecasting further increases later this year.Slower Pace The Fed's decision last month was the latest slowdown in policy after officials lifted rates at the fastest clip in four decades last year, including four consecutive 75-basis-point hikes. They started reducing that speed in December and delivered quarter-point hikes at each of the first three meetings this year.
Just before the release of the minutes, markets were penciling in a roughly 80% chance of a 25 basis-point increase this month and weren't foreseeing a further hike later in the year, according to fed funds futures data on Bloomberg. Officials have said the quick move up in interest rates since early 2022 allows them room to now assess how that tightening is affecting the economy.
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