Interest rate decision in February was made by a large majority

Broad consensus at the latest rate meeting.  Source: Reuters
Federal Reserve in Washington

Broad consensus at the latest rate meeting.

(Photo: Reuters)

Washington At the Fed’s most recent interest rate meeting, the small rate hike met with great approval, according to the US Federal Reserve. “Almost all” members of the Monetary Policy Committee were in favor of an increase of 0.25 percentage points, according to the minutes published on Wednesday (“Minutes”) of the interest rate decision of February 1st.

Few representatives would have supported or imagined an increase of 0.50 percentage points. There was no talk of an interest rate break.

At the February meeting, the Fed slowed the pace of rate hikes again. It raised key interest rates by 0.25 percentage points to a range of 4.50 to 4.75 percent.

In December, it had increased the key interest rate by 0.50 percentage points. Previously, it had raised interest rates four times in a row by 0.75 percentage points.

Fed chief Jerome Powell recently announced further rate hikes. A “significant” drop in the inflation rate is to be expected in the current year.

>> Read also: Investors are betting on stronger rate hikes from Fed and ECB

However, it will probably take until 2024 before this will again reach the target of two percent set by the Fed. Economists point to the still very strong labor market, which makes it difficult for inflation to fall.

Financial markets’ reaction to the protocol was muted. The euro weakened slightly against the US dollar. US Treasury yields edged up. There were discounts on the US stock markets.

More: Next stop 6 percent – how the Fed is preparing the markets for the next phase of rate hikes

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  • dpa

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