Most Fed members backed future rate hike, Fed September minutes show
Investing.com – Most Federal Reserve policymakers agreed that one more rate hikes would be «appropriate» and emphasized the need to keep interest rates higher for longer as inflation continues to trend well above the central bank’s 2% target, the Fed’s September meeting minutes showed Wednesday.
«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,» the Fed minutes showed.
At the meeting, the Fed held rates steady, and members doubled down on the central bank’s plan to keep rates elevated for much longer than previously expected after maintaining their forecast for another rate hike this year and reducing the number of rate cuts expected in 2024 to just two from four previously.
In the weeks since the Fed meeting, however, remarks from some members are now leaning more cautiously on further rate hikes following a sharp rise in Treasury yields, particularly longer-term rates, that have tightened financial conditions and are expected to dent growth, helping the Fed to curb inflation.
The yield on the 10-year Treasury and 30-year Treasury touched a 16-year high of 4.8% and 5.0% respectively last week, as the Fed’s higher- rate- for- longer message bolstered the term premium, or the compensation for the risk of holding a long bond given uncertainty about interest rate changes.
Fed members are “in a position to proceed carefully in assessing the extent of any additional policy firming that may be necessary,” Federal Reserve Vice Chair Philip Jefferson said Monday in remarks prepared for a speech at a National Association for Business Economics conference in
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