Some Federal Reserve policy makers would have supported raising interest rates last month even though officials decided to leave them unchanged, and many were prepared to raise them again this year. Minutes of officials’ June meeting, released Wednesday, offered little that would alter recent market expectations of another increase at their July 25-26 meeting to combat inflation.
The Fed last month held its benchmark federal-funds rate steady in a range between 5% and 5.25%, its first pause after 10 consecutive increases since March 2022, when officials lifted it from near zero. All 11 voting members of the policy-setting Federal Open Market Committee agreed to last month’s decision.
“Almost all participants judged it appropriate or acceptable" to hold rates steady last month given how high and rapidly the Fed had raised rates over the past year and because those moves will take time to influence economic conditions, the minutes said. But the minutes suggest several of the 18 voting and nonvoting officials at the meeting would have agreed to raise rates.
Some of them favored or could have supported a rate rise last month because “momentum in economic activity had been stronger than earlier anticipated, and there were few clear signs that inflation was on a path to return to the committee’s 2% objective over time," the minutes said. Officials at the June meeting penciled in two more increases this year, and the minutes said that projection would be a valuable tool in shaping public expectations about the need to raise rates further to bring inflation down to the Fed’s 2% target.
The Fed boosted interest rates aggressively in 2022 and then slowed the pace in December and February. Holding rates steady in June offered a
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