Fed united on need for more rate hikes
Federal Reserve policy-makers are largely united on the need to raise borrowing costs further, minutes from their most recent policy meeting show, despite US President Donald Trump鈥檚 view that interest rate hikes have already gone too far.
Every Fed policy-maker backed the central bank鈥檚 September decision to raise the target policy rate to between 2 percent and 2.25 percent, according to minutes of the September 25-26 meeting, published Wednesday.
Participants in the Fed鈥檚 rate-setting committee also 鈥済enerally anticipated that further gradual increases鈥 in short-term borrowing costs 鈥渨ould most likely be consistent鈥 with the kind of continued economic expansion, labor market strength, and firm inflation that most of them are anticipating, the minutes showed.
鈥淭his gradual approach would balance the risk of tightening monetary policy too quickly, which could lead to an abrupt slowing in the economy and inflation moving below the Committee鈥檚 objective, against the risk of moving too slowly, which could engender inflation persistently above the objective and possibly contribute to a buildup of financial imbalances,鈥 the minutes said.
Trump said in August he was 鈥渘ot thrilled鈥 with Fed Chair Jerome Powell for raising interest rates, and has since escalated his criticism, this week saying the central bank is his 鈥渂iggest threat,鈥 and last week calling the Fed 鈥渃razy,鈥 鈥渓oco,鈥 鈥渞idiculous,鈥 and 鈥渢oo cute.鈥
Although the minutes did not refer to any of Trump鈥檚 criticism, its message of further rate increases suggests that policy-makers are not fazed by it.
鈥淔or now, the Fed has made it clear that they are focused on their agenda despite rising presidential pressure on their rate decisions,鈥 said Mike Loewengart, vice president of investment strategy at E*Trade.
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