Fed Minutes show Policymakers’ Support for December Rate Hike

The minutes of the Federal Reserve meeting on September 19-20 showed that members of the FOMC had a prolonged discussion regarding the prospects of inflation's growth and slowing the rate of future interest rate hikes if it failed to pick-up.

Record of the most recent policy meeting showed that Fed officials see the economy growing at a steady rate. The minutes also show that policymakers expect inflation will reach the targeted 2 percent, with FOMC members anticipating that factors weakening inflation are temporary.

Several members said that they would focus on the incoming inflation data over the next few months when deciding regarding the future of interest rate moves.

It also indicated that an interest rate hike later this year is almost certain, despite some divisions regarding the outlook for the direction of inflation. According to the summary of the meeting, many members thought that another rate hike in the target range later this year, presumably in December, was likely to be warranted if the medium-term outlook continued to be unchanged.

In the end, the FOMC ruled against an interest rate hike at the meeting, choosing instead to announced that in October it would start to reduce its massive balance sheet, which will be done by allowing small part of the proceeds from its maturing bonds to roll off.

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