(Washington) The hike in interest rates decided at the last meeting of the US Federal Reserve Monetary Policy Committee (FOMC), on July 25 and 26, was not unanimous among the participants, according to the report released Wednesday.
After that meeting, “a few members indicated that they favored holding rates or might support such a proposal,” according to the Fed’s minutes.
At the end of this meeting, the FOMC finally decided to raise its rates again by 25 basis points, bringing them to a range between 5.25% and 5.50%, estimating that inflation in the United States was still above its target of 2% per year.
Published a few days after the meeting, the PCE index, which is the one favored by the Fed for its monetary policy, stood at 3% year on year in June, its lowest level since the beginning of the year. 2021.
Nevertheless, core inflation, which does not take into account volatile energy and food prices, remained at 4.1% year on year, although declining, in particular due to a ever less marked decrease in services, especially housing.
While diverging opinions were expressed on the rate hike, all participants felt that “maintaining the current level of restriction [of monetary policy] should make it possible to get closer to the objective” of 2% d inflation on an annual basis, “while giving the committee time to assess this progress”.
Furthermore, “most participants acknowledged that there are still risks” of persistent inflation that may “require further tightening of monetary policy.”
On Tuesday, Minneapolis Fed Chairman and FOMC member Neel Kashkari said it was still too early to “announce we’re done” with rate hikes, but said the Fed should “take the time necessary to have sufficient data” before deciding on a new increase.
Both headline and core inflation are expected to continue to ebb, Fed economists say, with indicators “pointing to a slowing in the pace of increases in house prices as well as non-housing services for the rest of the year.” year 2023″, with inflation expected to fall to 2.2% in 2025.
Kieran Clancy, economist for Pantheon Macroeconomics, expects “core services inflation to improve” ahead of the next Fed meeting and data released ahead of the meeting should “play in favor of a break “.
After the release of the Fed minutes, Wall Street reacted relatively little, its indexes remaining close to balance.
The dollar, on the other hand, strengthened a little: the euro was down 0.08% before the publication, but now down 0.26%, at 3:10 p.m., at 1.0877 dollars per euro.
The next Fed meeting is scheduled for September 19-20.
