A solid majority of monetary policymakers at the US Federal Reserve called for slowing the pace of interest rate hikes to a quarter of a percentage point at the most recent interest rate meeting. However, they also agreed that the dangers of high inflation remained a key factor in monetary policy direction, according to the minutes of the Fed’s first interest rate meeting of the new year, which have now been released. The key interest rates must therefore be raised further and kept at a high level until inflation is clearly on a path towards the central bank’s target of two percent. “Almost all participants agreed that it was appropriate to increase the target range of the key interest rate by 25 basis points,” the minutes said. Of these, many argued that this put the central bank in a better position to set the size of future hikes. Only a few monetary watchdogs would have clearly favored a larger interest rate hike of half a percentage point. The US Federal Reserve finally raised the key rate by a quarter of a percentage point to the new range of 4.50 to 4.75 percent at the meeting. After a recent series of relatively aggressive interest rate hikes, some normality has returned to US monetary policy. The Fed had already raised interest rates by half a point in December. Previously, it had boosted it four times in a row by 0.75 percentage points each time to curb inflation.
Rate hikes – currency watchdogs want to slow down – economy
