The minutes of the Federal Reserve's policy meeting last month may indicate on Wednesday how many policymakers feel the U.S. central bank is done raising interest rates and whether possible risks to the economy from the aggressive monetary tightening have taken on more weight in their debate. The Fed raised its benchmark overnight interest rate to the 5.25%-5.50% range at the July 25-26 meeting, a step Fed Chair Jerome Powell said at his post-meeting press conference may not be the last in an aggressive round of rate increases that began in March 2022 to offset the fastest breakout of inflation since the 1980s.
WASHINGTON - The minutes of the Federal Reserve's policy meeting last month may indicate on Wednesday how many policymakers feel the U.S. central bank is done raising interest rates and whether possible risks to the economy from the aggressive monetary tightening have taken on more weight in their debate.
The minutes, which are due to be released at 2 p.m. EDT , may show how much faith different groups of Fed officials have in a continued decline in inflation, or whether the bulk of them still feel another rate increase is likely needed, as most of them did in their last round of economic projections in June.
"There appears to be little consensus amongst policymakers regarding the path ahead," wrote Citi analyst Andrew Hollenhorst, who said he will look to the minutes for "the leading edge of a debate about the appropriateness of keeping policy rates elevated even as job growth and inflation have recently cooled.
And whatever the debate among policymakers as of the July 25-26 meeting, data since then has confirmed a continued hiring slowdown along the lines Fed officials have hoped might help cool the job market, while the closely-watched personal consumption expenditures price index excluding food and energy posted its first significant drop since 2022. The core PCE index fell in June to 4.1% from 4.6% in May, a fact only released after the Fed meeting, though economists expected the decline.
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