February FOMC Meeting Minutes

U.S. Federal Reserve

U.S. Federal Reserve Building
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Nearly all Federal Reserve policymakers rallied behind a decision to further slow the pace of interest rate hikes at the U.S. central bank's last policy meeting, but also indicated that curbing unacceptably high inflation would be the "key factor" in how much further rates need to rise.

In language that suggested a compromise between officials worried about a slowing economy and those convinced inflation would prove persistent, minutes from the Jan. 31-Feb. 1 meeting said policymakers agreed rates would need to move higher, but that the shift to smaller-sized hikes would let them calibrate more closely with incoming data.  Only "a few" participants outright favored a larger half-percentage-point increase at the meeting or said they "could have supported" it.

The Fed delivered a string of 75-basis-point and 50-basis point rate hikes in 2022 in its battle to curb inflation that had climbed to 40-year highs.  The central bank's policy rate is currently in the 4.50%-4.75% range.  The minutes' reference to inflation risks as a "key" to policy means recent data - showing less progress than hoped for - could mean a higher projected stopping point for the federal funds rate when policymakers issue new projections at the end of the March 21-22 meeting.

Source: Reuters

Posted By: Jeff A. Cheek
February 22, 2023
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