24 Nov 2015
Nine Fed banks called for discount rate hike in October
FXStreet (Córdoba) - Fed discount rate minutes showed that nine of the 12 regional banks sought for an increase in the discount rate to 1%.
Boston Fed joined the majority of banks calling for hike, up from eight in September. In August, only five regional banks had been requesting an increase in the discount rate.
Banks of New York and Chicago continued to support holding the rate unchanged at 0.75%, while Minneapolis continued to vote for a cut to 0.5%.
"Directors requesting an increase in the primary credit rate (to 1%) viewed a move toward a more normal level as appropriate in light of the improvements in labor market conditions this year and their expectations for inflation to rise gradually toward the Federal Reserve's 2% objective," the minutes said. "Some directors favoring an increase judged that an earlier start to the policy normalization process could allow for a more gradual pace of adjustment, thereby limiting the associated risks."
Boston Fed joined the majority of banks calling for hike, up from eight in September. In August, only five regional banks had been requesting an increase in the discount rate.
Banks of New York and Chicago continued to support holding the rate unchanged at 0.75%, while Minneapolis continued to vote for a cut to 0.5%.
"Directors requesting an increase in the primary credit rate (to 1%) viewed a move toward a more normal level as appropriate in light of the improvements in labor market conditions this year and their expectations for inflation to rise gradually toward the Federal Reserve's 2% objective," the minutes said. "Some directors favoring an increase judged that an earlier start to the policy normalization process could allow for a more gradual pace of adjustment, thereby limiting the associated risks."