8/17, 8:05 PM (Source: TeleTrader)
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Rate hikes could slow due to policy assessment - FOMC minutes

The pace of interest rate hikes could decelerate "at some point" so the United States Federal Reserve could assess the overall economic consequences of the monetary policy tightening, according to the Federal Open Market Committee (FOMC) July meeting minutes released on Wednesday.

At the meeting, central bank officials noted that they expect that most effects of monetary policy changes had "yet to be felt" as policy transmission is lagging and that policy impact on consumer prices was "not yet apparent in the data." Some meeting participants suggested that interest rates, when they reach "a sufficiently restrictive level," should remain there "for some time to ensure that inflation was firmly on a path back" to the Fed's 2% target. A number of central bankers also saw risks that policy stance could become restrictive "more than necessary," especially considering "the constantly changing nature of the economic environment."

In addition, policymakers "remarked that the strength of the labor market suggested that economic activity may be stronger than implied by the current GDP data." However, the Fed projected that the unemployment rate will begin increasing in the second half of 2022 and stressed that the July US economic activity estimates are "noticeably weaker" than those from June.

Baha Breaking News (BBN) / MS