Fed policymakers divided over rate-hike logic in September, minutes show
WASHINGTON — Federal Reserve policymakers were divided last month over the rationale for raising interest rates, with "some participants" seeing a hike as needed to keep the impact of energy and other price shocks at bay, but a more hawkish core viewing it as necessary to guard against emerging demand-driven inflation. The competing arguments were outlined in the minutes of the US central bank's…
Federal Reserve policymakers found themselves divided in September regarding the justification for raising interest rates, according to minutes from the central bank's September 15-16 meeting. Some participants believed a rate hike was necessary to prevent the impact of energy and other price shocks from persisting, while a more hawkish faction argued it was essential to prevent inflation driven by demand.
The conflicting perspectives were highlighted in the minutes, which detailed the Fed's unanimous decision to raise the policy rate by 0.25% despite ongoing disagreements about the nature of the move. This discrepancy in views has set the stage for an anticipated heated discussion at the upcoming October 27-28 policy meeting, where participants will debate whether inflation has evolved into a more widespread, demand-driven issue that requires additional Fed intervention.
Alternatively, they may opt to postpone further rate hikes to monitor data indicating the diminishing effects of energy, tariff, and other price shocks.
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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