Fed Minutes Show Officials Divided on Future Rate Rise

livemint.com:

Federal Reserve officials were split over whether they would need to raise interest rates again this year when they decided last month to hold their benchmark policy rate steady. “A majority of participants judged that one more increase in the target federal-funds rate at a future meeting would likely be appropriate, while some judged it likely that no further increases would be warranted," said the minutes from the Fed’s Sept. 19-20 policy meeting released Wednesday.

Officials most recently raised their benchmark federal-funds rate in July to a range between 5.25% and 5.5%, a 22-year high. They began lifting rates from near zero in March 2022. A run-up in long-term Treasury yields that began in August accelerated after last month’s meeting.

If sustained, the rise in yields could moot the need for Fed officials to raise rates again this year. Economic projections released last month showed most officials had penciled in one more rate rise this year. But they made those projections before a further jump in long-term yields, which is raising rates on mortgages, auto loans and business debt.

“Financial markets are tightening up, and they are going to do some of the work for us," said Fed governor Christopher Waller at a conference in Park City, Utah, on Wednesday. “We’re in this position where we kind of watch and see what happens on rates." Investors have been digesting stronger economic data that suggests the Fed might have less reason to cut interest rates as soon as many market participants previously anticipated, which could lift yields. Rates could also be rising because of concerns over how the U.S.