Fed officials split in July on whether rate hike needed soon


 officials were divided in July over the urgency to raise interest rates again, with some preferring to wait because inflation remained benign and others wanting to go soon as the labor market nears full employment.
“Several suggested that the committee would likely have ample time to react if inflation rose more quickly than they currently anticipated, and they preferred to defer another increase in the federal funds rate until they were more confident that inflation was moving closer to 2 per cent on a sustained basis,” according to the minutes of the central bank’s July 26-27 policy meeting released in Washington on Wednesday.
“Some other participants viewed recent economic developments as indicating that labor market conditions were at or close to those consistent with maximum employment and expected that the recent progress in reaching the committee’s inflation objective would continue, even with further steps to gradually remove monetary policy accommodation,” the minutes also showed.
At the July meeting, the Federal Open Market Committee left the benchmark interest rate in a range of 0.25 per cent to 0.5 per cent and noted that “near-term risks to the economic outlook have diminished.”
A number of Fed policy makers have suggested in public comments since the last meeting that it will probably still be appropriate to raise interest rates at least once this year, with some indicating a move could come as soon as the FOMC’s September 20-21 gathering.
Investors will listen closely for additional clues on timing when Fed Chair Janet Yellen will… Read full story


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