The majority of Federal Reserve officials believe one additional interest rate hike is likely, according to the minutes from the Federal Open Monetary Committee’s September meeting released Wednesday.
“A majority of participants judged that one more increase in the target federal funds rate at a future meeting would likely be appropriate, while some judged it likely that no further increases would be warranted,” the minutes stated.
One point of common ground from the September 19-20 meeting, however, was that interest rates would need to remain elevated until the committee is confident that inflation is headed to its target rate of 2%.
Notably, that meeting ended with the FOMC opting not to raise rates.
Another point of agreement was, “that policy should remain restrictive for some time until the Committee is confident that inflation is moving down sustainably toward its objective.”
Turning to the Fed’s dot plot, two-thirds of the FOMC suggested that one more interest rate increase would be necessary by the end of 2023.
Since March 2022, the FOMC has raised interest rates 11 times up to a targeted range of 5.25% to 5.5%, the highest such range in more than two decades.
Wednesday morning, data from the US Bureau of Labor Statistics showed the 12-month producer price index rose to 2.2% in September from a year before, up from a 2% annual increase in August. Markets had been expecting the inflation rate to cool to 1.6%.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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