The Federal Reserve released the minutes of its latest monetary policy meeting on Wednesday, reiterating that a majority of participants expect one more interest rate hike will likely be appropriate.
The projections provided following the meeting forecast one more rate hike before the end of the year, although the minutes noted some officials judged it likely that no further increases would be warranted.
“All participants agreed that the Committee was in a position to proceed carefully and that policy decisions at every meeting would continue to be based on the totality of incoming information and its implications for the economic outlook as well as the balance of risks,” the Fed said.
The Fed’s next monetary policy meeting is scheduled for October 31-November, with CME Group’s FedWatch Tool currently indicating just a 5.9 percent chance of a quarter point rate increase.
The FedWatch Tool indicates a 26.9 percent chance of a quarter point rate hike at the Fed’s final meeting of the year set for December 12-13.
Meanwhile, the minutes said all participants agreed that policy should remain restrictive for some time until the Fed is confident that inflation is moving down sustainably toward its 2 percent objective.
A few participants said the pace at which inflation was returning to the 2 percent goal would influence their views of the sufficiently restrictive level of the policy rate and how long to keep policy restrictive.
“Several participants commented that, with the policy rate likely at or near its peak, the focus of monetary policy decisions and communications should shift from how high to raise the policy rate to how long to hold the policy rate at restrictive levels,” the Fed said.
Participants generally judged that risks to the achievement of the committee’s goals had become more two sided, the Fed said, although most participants continued to see upside risks to inflation.
Following the meeting, the Fed announced its widely expected decrease to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent
“Participants judged that maintaining this restrictive stance of policy would support further progress toward the Committee’s goals while allowing the Committee time to gather additional data to evaluate this progress,” the minutes said.
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