FILE PHOTO: An eagle tops the U.S. Federal Reserve building’s facade in Washington, July 31, 2013. REUTERS/Jonathan Ernst/File Photo
(This Feb. 28 story and headline have been corrected to show the final votes ahead of the Fed meeting)
(Reuters) – Nine of 12 Federal Reserve bank boards voted ahead of the Fed’s Jan. 31-Feb 1 meeting to raise the discount rate by a quarter point after two of them had earlier supported no change to the rate.
The boards of directors of the Atlanta and Dallas Federal Reserve Banks voted in mid-January to keep unchanged the rate charged to commercial banks for emergency loans, but later that month voted for a 25 basis point increase, minutes of their discount rate meetings showed on Tuesday.
Meanwhile directors on the boards of the Cleveland, St. Louis and Minneapolis Fed banks voted for a half-point increase in that rate, the minutes showed.
Fed policymakers at their Jan. 31-Feb. 1 meeting decided to raise the benchmark policy rate by a quarter of a percentage point, to a 4.5%-4.75% range.
The split among Fed banks over the appropriate setting for the discount rate, which is separate from but moves in step with the rate set by the Fed’s policymaking panel, suggests some disagreement over how much further rates ought to rise to bring down too-high inflation.
“Directors were generally cautious or concerned about a weaker outlook for the economy, and some directors expected the inflation rate, which remained elevated, to slowly moderate in 2023,” the minutes said.
Fed presidents say the views of their directors help shape their outlooks, even if they don’t set the actually policy rate.