Khaberni - The minutes of the Federal Reserve meeting (the U.S. Central Bank), held on January 27 and 28, show that its officials almost unanimously supported keeping the interest rates steady, yet remained divided regarding future steps.
Some of them hinted at the possibility of raising borrowing costs if inflation continues to rise, while others were divided about whether more cuts were necessary and their timing.
The minutes, published on Wednesday, stated that nearly all U.S. central bank officials agreed on the decision to keep interest rates steady as a measure to assess the economic situation after reducing them by 75 basis points last year, while only two supported reducing them further.
Board members, Christopher Waller and Steven Miran, expressed their objections to the interest rate committee's decisions in the meeting, due to concerns about potential declines in the job market.
However, views were split among the other seventeen officials, with the first direct mention of the possibility of interest rate hikes if inflation continues above the Federal Reserve's 2% target. Currently, inflation is around 3%.
Despite widespread expectations of a decline in inflation this year, which is expected to pave the way for further reductions in interest rates, the meeting minutes noted that "a number of participants indicated their support for a dual interpretation of the Federal Open Market Committee's future interest rate decisions, reflecting the possibility of raising the target range for the federal funds rate if inflation continues above target levels."
On the other hand, others saw the need to keep interest rates "fixed for a while" in anticipation of new data on inflation and the economic situation, while a team among them believed that cuts might not be appropriate at all until there were indications of "inflation returning to its proper track."
Conversely, a number of analysts mentioned that their core forecasts for inflation and the economy include more reductions in interest rates.
The minutes of the January meeting show that the officials voted to maintain the basic interest rate within the current range of 3.50 to 3.75 percent, indicating that it may continue at this level for a period of time, hinting at a tendency towards monetary tightening.
However, investors expect the Federal Reserve to maintain the current interest rate until the meeting on June 16-17, with expectations of quarter-percentage-point cuts in the interest rate during that session and the September session.
