22/02/2023
Fed Minutes: Almost all officials backed quarter-point hike
The minutes from the Fed’s Jan. 31-Feb.1 meeting said most of the officials supported the quarter-point hike because a slower pace “would better allow them to assess the economy’s progress” toward reducing inflation to their 2% target. The increase raised the Fed’s benchmark rate to a range of 4.5% to 4.75%, the highest in 15 years.
The central bank’s rate hikes typically lead to increases in the costs of mortgages, auto loans, credit card borrowing and business lending.
At the meeting, Fed officials also unanimously agreed that “ongoing increases” in the Fed’s key rate “would be appropriate,” which points to additional hikes in the next two meetings, at least.
Overall, the minutes showed that the Fed's policymakers emphasized their determination to keep rates high to curb high inflation even as they welcomed a slowdown since the fall.
Since the meeting, the outlook for inflation has become more worrisome. At a news conference Feb. 1, after the meeting, Chair Jerome Powell stressed that inflation, while still too high, was gradually cooling. He also suggested that it was still possible the Fed could quell inflation without raising rates so high as to cause widespread layoffs and a deep recession.
