The Federal Reserve The United States agreed to hold interest rates at the June meeting to buy time to assess whether more hikes would be needed, despite the vast majority expecting to have to further tighten monetary policy, according to meeting minutes released on Monday. Wednesday.
Yes ok “some“they wanted to go ahead with a rate hike in June because progress in cooling inflation had been slow,”almost all participants judged it appropriate or acceptable to maintain” the Fed benchmark interest rates at the current 5% to 5.25%, according to the minutes.
“Most participants noted that leaving the target range unchanged at this meeting would give them more time to assess the progress of the economy.” towards the return of inflation to 2% from its current level of more than double.
The minutes add details to the monetary policy statement and economic projections released after the June 13-14 meeting, in which the Federal Reserve ended a 10-meeting streak of rate hikes with a decision to hold the rate steady. benchmark for federal funds.
Although Fed staff forecasts continue to point to a “mild recessionStarting at the end of the year, policymakers had to contend with data showing a still tight labor market and only a modest improvement in inflation.
Projections after the June meeting showed that 16 of 18 officials still expected the policy rate to rise by at least another quarter of a percentage point by the end of the year.
Against that backdrop, Fed Chairman Jerome Powell, in a post-June meeting news conference, said the decision marked a change in strategy, with the central bank more focused on how much more monetary policy tightening it could do. be necessary and less in maintaining a constant rate of increases.
According to Powell, “it is appropriate to move at a more moderate pace to be able to make that judgment” in the time.
Investors in contracts linked to the overnight federal funds rate believe that the Federal Reserve is very likely to raise the benchmark rate by a quarter of a point, to a range between 5.25% and 5.5%, in their meeting on July 25 and 26.
Source: Reuters
Source: Gestion
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