By Jeff Cox
Federal Reserve officials worried at their July meeting about the state of the labor market and inflation, though most agreed that it was too soon to lower interest rates, minutes released Wednesday showed.
The meeting summary depicted a divergence of opinion among the central bankers, whose vote to hold their key rate steady came despite objections from two Fed governors who argued in favor of cutting.
Policymakers noted rising threats to the economy that would warrant monitoring, though they largely agreed that their current stance was the appropriate way to go.
“Participants generally pointed to risks to both sides of the Committee’s dual mandate, emphasizing upside risk to inflation and downside risk to employment,” the minutes noted. While “a majority of participants judged the upside risk to inflation as the greater of these two risks” a couple saw “downside risk to employment the more salient risk.”
Governors Christopher Waller and Michelle Bowman voted against the decision to hold rates steady, preferring instead that the Federal Open Market Committee start lowering its key rate. The fed funds rate, which sets what banks charge each other for overnight lending but is used as a benchmark for other consumer rates, has been targeted between 4.25%-4.5% since December.
This was the first time that multiple governors voted against a rate decision in more than 30 years.
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