Members of the Federal Open Market Committee agreed last month it was “prudent” to gather more information on labor and economic developments ahead of any future rate increases, minutes from the July 26-27 meeting show.
The FOMC decided at that meeting to maintain the federal funds rate at 0.25% to 0.5% with one member dissenting from that decision.
Citing the “easing of financial conditions since the U.K. referendum, the return to trend economic growth, solid job growth and inflation toward 2%,” Esther George, Federal Reserve Bank of Kansas City president and CEO, said last month that she wanted rates raised to between 0.5% and 0.75%, according to the minutes.
However, the committee “recognized that progress on the inflation front has been very slow, and a number of members prefer to see clearer evidence that inflation is moving closer to the 2% inflation objective before raising rates again. This suggests a great deal of caution going forward,“ said Steven Friedman, senior investment strategist at BNP Paribas Investment Partners, in an e-mail. “There is nothing in the minutes to suggest any real urgency to raise rates in the near term.”
The minutes did not spell out the timing of a future rate hike, but they disclosed that some members expected that economic conditions would “soon” warrant another increase.
