Fed Minutes Show More Interest Rate Hikes Ahead

The latest meeting minutes from the U.S. Federal Reserve indicate that more interest rate increases are coming this year.

Officials at the June meeting of the U.S. central bank felt that further monetary policy tightening is likely in the coming months, albeit at a slower pace.

Fed policymakers decided against raising interest rates at their last meeting in June due to concerns over economic growth.

Federal Open Market Committee members felt that a pause would give the committee time to assess the impacts of previous rate hikes, which have totaled five percentage points, the most aggressive increase since the early 1980s.

However, the meeting minutes show that all but two of the 18 participants expect at least one more rate hike this year, and 12 members expect two or more interest rate increases.

Even among those favoring more tightening, there was a general feeling that the pace of hikes, which included four straight 0.75 percentage point increases, would now slow.

Most recently, the Fed’s preferred inflation gauge increased 0.3% in May, below economists’ expectations.

The Fed is next scheduled to decide on interest rates on July 26.

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