Summary
- The Fed said it should consider rate hikes if inflation pressures persist and remain above its 2% target.
- The minutes said officials argued policymakers needed to signal to markets that the next move could be a rate hike, marking a shift away from the previous rate-cut bias.
- Markets are watching how the Fed's increasingly hawkish stance could affect US stocks and global financial markets.
Forecast Trend Report by Period
The Federal Reserve signaled it may need to consider another interest-rate increase if inflation pressures persist, underscoring a more hawkish tilt within the central bank.
Minutes of the Federal Open Market Committee released on May 20 showed the Fed held its benchmark interest rate at 3.5% to 3.75% at a policy meeting three weeks earlier.
The central bank said it took into account inflation pressures driven by higher energy prices and uncertainty surrounding the Middle East, even as the economy continued to expand.
Eight officials, including Chair Jerome Powell, voted for the decision.
Stephen Miran dissented in favor of a rate cut.
Beth Hammack, Neel Kashkari and Lorie Logan also opposed including easing-biased language in the statement, the minutes showed.
Most Fed officials said the central bank should consider raising rates if inflation continues to run above its 2% target.
Many also said policymakers needed to signal to markets that the next policy move could be a rate increase, breaking from the previous bias toward rate cuts.
With oil prices surging and Treasury yields rising, expectations for a rate cut later this year have weakened rapidly.
Markets are now focused on how the Fed's more hawkish stance could affect US stocks and global financial markets.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.