Some Federal Reserve officials pushed to raise the Fed’s key interest rate by one-quarter of a percentage point at their meeting last month to intensify their fight against high inflation, though the central bank ultimately decided to forgo a rate hike.
File - Federal Reserve Chair Jerome Powell attends a news conference following a Federal Open Market Committee meeting, Wednesday, June 14, 2023, at the Federal Reserve Board Building in Washington. On Wednesday, the Federal Reserve releases minutes from its June meeting when it chose not to raise its benchmark borrowing rate for the first time in 15 months in its fight against inflation.
Though last month's vote to keep rates unchanged was unanimous, it is relatively uncommon for the central bank to stipulate in the minutes of Fed meetings that some officials had disagreed with the committee’s decision. Twelve of the 18 members of the rate-setting committee have projected at least two more rate hikes this year, according to the members' projections released last month. Four envisioned one more increase. Just two officials foresaw keeping rates unchanged.
At the same time, a majority of officials signaled that they expect to raise rates twice more this year — once more than had previously been expected. In their quarterly economic projections, the policymakers also forecast higher inflation and modestly stronger growth than they had envisioned in June. Those upward revisions are a sign that the economy has been more resilient than Fed officials have expected.
On the other hand, the officials' forecast for two more rate hikes suggested that they still believe more aggressive action is needed to defeat high inflation. And Powell has said more rate hikes are likely this year. Some economists expect the Fed to raise rates at every other meeting as it seeks to pull off a difficult maneuver: Raising borrowing costs high enough to cool the economy and tame inflation yet not so high as to cause a deep recession.
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