“Most participants said that leaving the target range unchanged at this meeting would give them more time to assess the progress of the economy” toward returning inflation to 2% from its current level of more than double.
The minutes add details to the monetary policy statement and economic projections released after the June 13-14 meeting, in which the Federal Reserve ended a 10-meeting streak of rate hikes with a decision to hold the rate steady. benchmark for federal funds.
Although Fed staff forecasts continue to point to a “mild recession” from the end of the year, policymakers had to contend with data showing a still-tight labor market and only a modest improvement in inflation.
Projections after the June meeting showed that 16 of 18 officials still expected the policy rate to rise by at least another quarter of a percentage point by the end of the year.
Against that backdrop, Fed Chairman Jerome Powell, in a post-June meeting news conference, said the decision marked a change in strategy, with the central bank more focused on how much more monetary policy tightening it could do. be necessary and less in maintaining a constant rate of increases.
According to Powell, “it’s appropriate to move at a more moderate pace to be able to make that judgment” over time.
Investors in contracts linked to the overnight federal funds rate believe that the Federal Reserve is very likely to raise the benchmark rate by a quarter of a point, to a range between 5.25% and 5.5%, in its meeting on July 25 and 26.