Federal Reserve officials agree to skip June hike
Federal Reserve officials agree to skip June hikeThe joint US Federal Reserve agreed at its June meeting to take time to keep interest rates steady and assess whether further rate hikes will be needed, although a vast majority expect them to eventually hold policy. Will need to be tougher.
The minutes of the meeting were released on Wednesday. While “some participants” wanted to proceed with a rate hike in June because progress toward reducing inflation was slow, “nearly all participants considered keeping the federal funds rate at the current 5.5% appropriate or acceptable.” % to 5.25%, stated in minutes. “Most of those participants observed that leaving the target range unchanged at this meeting would give them more time to assess the economy’s progress,” more than doubling inflation back to 2% from its current level The minutes added to the policy statement and economic projections released after the June 13-14 session, when the Fed ended its 10-meeting run of rate hikes with a decision to hold the benchmark federal funds rate steady.
The market was little changed after that minutes, with futures traders tied to the Fed policy rate continuing to see a rate hike in July with a one in three chance of another hike before the end of the year. While Fed staffers still see a “mild recession” later this year, they now see avoiding a recession as slightly less likely than their baseline. US Federal Reserve agreed at its June
And struggled with data showing only modest improvements in inflation. Officials also tried to reconcile headline numbers showing continued economic strength with evidence of potential weakness — domestic employment figures that showed more signs of a weak labor market than payroll numbers. hinted at, or national income data that seemed weaker than more prominent GDP readings.
The argument for waiting, whether akin to “skipping” a meeting or turning into a longer pause However, what the officials said still reflects deep uncertainty about whether the Fed has already raised rates enough to tame inflation – and just needs to wait for the tightening policy to take effect – or There is still a need to exert more pressure on the economy.” US Federal Reserve agreed at its June
Most participants observed that there is uncertainty about the outlook for the economy and inflation remains high and additional information would be valuable to consider an appropriate stance of monetary policy, “Min. stated in. Projections released after the June meeting showed that 16 of 18 officials still expect a policy interest rate hike of at least a quarter percentage point more through the end of the year.
In that context, Fed Chairman Jerome Powell said at a press conference after the June meeting that the decision marked a change in strategy, with the central bank focusing more on how much additional policy tightening is needed. And less if the steady pace of growth is maintained, Powell said. It is worth expanding into a more moderate tempo to allow you to decide this over time. US Federal Reserve agreed at its June
Investors in contracts linked to the overnight federal funds rate are highly likely to raise the benchmark rate by a quarter point to between 5.25% and 5.5% at the Fed’s July 25-26 meeting.
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