Fed minutes highlight more rate hikes

The minutes of the June meeting, where the Fed decided to keep interest rates unchanged, show that some members wanted to continue raising interest rates in June, while almost all officials expected more interest rate hikes in 2023. The minutes signaled that there could be a rate hike in July as well. The minutes of the Fed's June meeting have been published. The minutes show that some officials favored a 25 basis point increase in this meeting, while almost all officials expected more interest rate hikes in 2023, but at a slower pace. According to the minutes, most officials saw skipping June as "appropriate or acceptable." Almost all officials stated that additional interest rate hikes were appropriate this year. The Fed continued to expect a "mild" recession in the economy in 2023. Officials stated that the risks to growth were downward and unemployment were upward. The Fed decided to keep its policy rate unchanged after 15 months of tightening at its June meeting, and Chairman Jerome Powell signaled that another 50 basis point rate hike was on the table this year. Although policymakers were in favor of continuing interest rate hikes, they did not raise interest rates due to concerns about economic growth. According to the minutes, officials wanted to gain time to monitor whether the economy would approach the Fed’s maximum employment and price stability goals. Again, the minutes included the following statements: “The economy was facing tightening credit conditions, including high interest rates, which could put pressure on economic activity, employment, and inflation. It is unclear how long these effects will last.” It was also emphasized that the stress in the banking sector had eased and conditions had improved since the beginning of March.