Federal Reserve June 2023 Meeting Minutes Reveal Majority Expect Further Rate Hikes and Inflation Battle
The Federal Reserve's June 2023 meeting minutes highlight strong consensus among policymakers for additional interest rate increases this year to combat persistent inflation.
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Highlights from the Fed’s June 2023 Meeting
- The June 2023 Federal Reserve meeting minutes indicate ongoing support for raising interest rates to curb inflationary pressures.
- Policymakers agreed to temporarily pause rate hikes in June to evaluate the effects of previous monetary tightening.
- Several members expressed preference or support for a 25 basis points increase during this pause.
Nearly all Federal Reserve Board members concurred at their June 13-14, 2023 meeting that additional interest rate increases will be necessary this year to effectively manage inflation, despite a brief pause following ten consecutive hikes.
The minutes detail that the target federal funds rate was held steady at 5% to 5.25% to allow time for assessing the impact of prior rate adjustments. However, some participants noted they favored or could have supported a 25 basis points rise.
Advocates for the June increase cited a persistently tight labor market, stronger-than-expected economic activity, and limited evidence that inflation is trending back toward the Fed’s 2% target.
The meeting’s 'dot plot' projection showed that 16 of 18 members anticipate at least one more rate hike this year, with 12 forecasting two or more increases.
The Federal Reserve’s upcoming policy meeting is scheduled for July 25-26, 2023, where market futures suggest a 25 basis points hike is likely, according to CME Group data.
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