April 11 Just two weeks before the Federal
Reserve's mid-March decision to raise U.S. interest rates, only
seven out of 12 regional Federal Reserve banks appeared to back
the idea, minutes from discussions of the discount rate showed
And even by March 9, less than a week before the meeting,
directors at the influential New York Fed wanted the Fed to
stand pat on its discount rate, which is what commercial banks
are charged for emergency loans and which typically moves in
tandem with the Fed's main short-term policy rate. Directors at
the St. Louis and Minneapolis Fed also wanted no change in the
At the conclusion of its March 14-15 meeting, the Fed raised
its target rate. New York Fed President William Dudley voted for
the rate hike; Minneapolis Fed President Neel Kashkari voted
against. The chief of the St. Louis Fed, James Bullard, does not
vote this year on Fed policy.
The minutes of the discount rate meetings suggest more
disagreement from regional banks over the increase than had
previously been understood.
The Federal Reserve Banks of New York, San Francisco,
Atlanta, St. Louis and Minneapolis asked the Fed's board to keep
the discount rate unchanged at 1-1/4 percent in meetings held
Feb. 23 and March 2, ahead of the Fed's March 14-15 meeting, the
minutes released Tuesday showed.
Directors at those five banks thought leaving the rate
unchanged would be appropriate, pending the assessment of new
data "over the coming months."
Directors at the seven other banks wanted an increase
because they believed economic activity and labor markets were
strengthening and inflation would rise to the Fed's 2-percent
goal in the medium term, the minutes said.
In meetings held March 9, only about a week before the Fed's
policy-setting meeting, directors of the San Francisco and
Atlanta Feds switched sides, joining the seven that had already
asked for an increase in the rate.
(Reporting by Ann Saphir; Editing by Andrea Ricci)