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Fed Minutes: officials are less confident of the need for more rate hikes

Economies.com
2023-05-24 19:01 UTC

The Federal Reserve's meeting minutes showed division between officials on the need for further increases to interest rates, with some members expressing the need to, and others calling for a tapering off.

 

The Federal Reserve decided earlier this month to raise interest rates by 25 basis points, but the minutes shed light on the divisions about the next stop, with the overall tone pointing to a pause in policy tightening. 

 

At the last meeting, Federal Open Market Committee officials decided to remove a major passage off the manifest, which pointed to the need to maintain current monetary policies. 

 

The Fed is now depending more on fresh data to decide the next move. 

 

Overall, members expressed uncertainty on whether upcoming policy tightening is useful, with the discussions ending with two potential scenarios: 

 

The first was the view of some members that inflation reduction has been unacceptably slow, and thus there's a need for more rate hikes. 

 

The second was the view of some members who pointed to a slowdown in growth, which necessitates a pause to policy tightening. 

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