By Howard Schneider
WASHINGTON (Reuters) — The minutes of the Federal Reserve's policy meeting last month may indicate on Wednesday how many policymakers feel the U.S. central bank is done raising interest rates and whether possible risks to the economy from the aggressive monetary tightening have taken on more weight in their debate.
The Fed raised its benchmark overnight interest rate to the 5.25%-5.50% range at the July 25-26 meeting, a step Fed Chair Jerome Powell said at his post-meeting press conference may not be the last in an aggressive round of rate increases that began in March 2022 to offset the fastest breakout of inflation since the 1980s.
But Powell also said the «pieces of the puzzle» were beginning to fall into place to push inflation lower, including improved supply chains, a moderation in the demand for workers, and tighter lending conditions.
The minutes, which are due to be released at 2 p.m. EDT (1800 GMT), may show how much faith different groups of Fed officials have in a continued decline in inflation, or whether the bulk of them still feel another rate increase is likely needed, as most of them did in their last round of economic projections in June.
An additional quarter-percentage-point rate increase, whether at the Fed's Sept. 19-20 meeting or later in the year, would be marginal in its macroeconomic impact, a small addition to the 5.25 percentage points the Fed has added to its policy rate over the 16 months ending in July.
It would, however, send an important signal to bond and stock markets that are largely convinced the central bank is finished raising rates and will now begin looking for the right moment to start cutting.
«There appears to be little consensus amongst policymakers
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