“Almost all” members of the Monetary Policy Committee would expect further hikes in 2023, according to the Minutes of the June 14 decision published on Wednesday. Even then, some members would have advocated a further increase, but then joined the majority opinion for a break.
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At its most recent meeting, the US Federal Reserve left the key interest rate range between 5.0 and 5.25 percent. In March 2022, this was still just above the zero line. Since then, the Fed has raised interest rates sharply. US Federal Reserve Chairman Jerome Powell recently described further interest rate hikes as likely to be necessary in the fight against high inflation. Initially, they only slowed down the pace of the increases. The future dates are crucial. The Fed has recently acted more cautiously, since it apparently wants to avoid putting too much strain on the economy as a result of interest rate hikes.
The Fed writes that one remains very vigilant with regard to the development of inflation. “While headline inflation has moderated, core inflation has not declined sustainably since the beginning of the year,” the minutes said. The inflation rate in May was 4.0 percent, while the core inflation rate was 5.3 percent. This calculates food and energy prices that are susceptible to fluctuations. The Fed is targeting a headline inflation rate of 2 percent.
The statements from the protocol were not surprising. The reaction in the financial markets was therefore limited. The euro was recently quoted near its daily lows against the dollar. US government bond prices remained under pressure. The US stock markets hardly reacted to the published and continued to trade in the red.
/jsl/he
WASHINGTON (dpa-AFX)
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