Fed Meeting Minutes: Officials Ready to Raise Interest Rates if Inflation Doesn't Ease 📈
Fed officials believe it will take a long time to achieve the 2% inflation target before cutting interest rates.
The Fed stated they are prepared to raise interest rates again if inflation doesn't decrease. 📊 In the minutes from the policy meeting on April 30 and May 1, many officials expressed readiness to tighten policy further if necessary.
At the meeting, Fed officials voted to keep the benchmark interest rate at 5.25%-5.5%, the highest level in 23 years, maintained since last July.
Inflation indicators have decreased but remain "disappointing," with inflation expected to be "persistent in the coming months." Housing prices and labor costs have not decreased as much as expected, raising concerns for the Fed. 🏠💼
Due to stable economic growth and high consumer demand, prices remain elevated. Thus, Fed officials believe it will take more time to gain confidence that inflation is moving towards the 2% target.
Fed Governor Waller said he doesn't expect the Fed to have to raise interest rates but emphasized the need to see data improvement over the "next few months" before voting to cut rates. 🗓️
Chairman Jerome Powell asserted that the Fed needs patience and to let restrictive policies take effect amid rising inflation. 📉
The market has adjusted expectations for a rate cut this year, with about a 60% chance of the first cut in September and 50% in December. 📅
According to Market Watch, CNBC
