• By Vaamanaa Sethi
  • Thu, 17 Aug 2023 11:22 AM (IST)
  • Source:JND

The US Federal Reserve released minutes from the July 25-26 monetary policy meeting, which shows that the Fed is not finished with hiking interest rates.

“Most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy," the minutes said. It added that its future moves will depend on the totality of incoming information and its implications for the outlook.

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It said, “Participants remained resolute in their commitment to bring inflation down to the ... 2% objective," the minutes said. It also said that the decision to raise the interest rate by a quarter point wasn't unanimous among the broader panel of about 18 officials. 

The Federal Open Market Committee's (FOMC) 11 members unanimously voted to raise interest rates by a quarter point to a 22-year high, two favored leaving rates unchanged.

In the July meeting, Fed policymakers unanimously agreed to raise the benchmark overnight interest rate to the 5.25%-5.50% range. The minutes of Fed further said that the level of uncertainty remained high and the future rate decisions would depend on the data arriving in coming months to clarify the extent to which the disinflation process was continuing.

“These included the possibility that the macroeconomic effects of the tightening in financial conditions since the beginning of last year could prove more substantial than anticipated,” the minutes said.

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Fed Chair Jerome Powell said, on July 26, “We intend again to keep policy restrictive until we’re confident that inflation is coming down sustainably to our 2% target, and we’re prepared to further tighten if that is appropriate.” 

After the Fed minutes were released, the S&P 500 extended losses on the day, however, the dollar saw a significant rise.