The latest Federal Open Market Committee meeting showed Wednesday Kansas City Fed President Esther George had some support of her view another rate hike was appropriate from a couple non-voting members.
The committee held steady the policy fed funds rate at 0.25% to 0.50% on a 9-1 vote with George dissenting from the decision preferring instead the committee raise the target range for the rate to 0.50% to 0.75%.
“Most participants,” which includes all 17 board members and regional Fed presidents, agreed with the voting majority that it was appropriate to keep the fed funds rate where it has been since December when the FOMC raised rates for the first time since 2006.
“A couple of participants, however, saw an increase in the target range to 1/2 to 3/4 percent as appropriate at this meeting,” the minutes said, “citing evidence that the economy was continuing to expand at a moderate rate despite developments abroad and earlier volatility in financial conditions, continued improvement in labor market conditions, the firming of inflation over recent months, and the apparent leveling-off of oil prices.”
In their judgment, the minutes continued, “increasing the target range for the federal funds rate too gradually in the near term risked having to raise it quickly later, which could cause economic and financial strains at that time.”
Several participants argued for proceeding cautiously in reducing monetary policy accommodation “because they saw the risks to the U.S. economy stemming from developments abroad as tilted to the downside or because they were concerned that longer-term inflation expectations might be slipping lower, skewing the risks to the outlook for inflation to the downside,” the minutes said.