WASHINGTON (Reuters) - Three out of 12 regional Federal Reserve banks were against an increase in the rate commercial banks are charged for emergency loans ahead of the U.S. central bank’s last policy meeting when it raised interest rates, minutes from the discussion of the discount rate showed on Tuesday.
The U.S. central bank raised the discount rate by a quarter percentage point to 2 percent and increased its benchmark lending rate at its Dec. 12-13 meeting.
Directors at the Federal Reserve banks of Chicago, Minneapolis and St. Louis based their decision against raising the discount rate on the disappointing readings on inflation.
The Fed has missed its 2 percent target rate on inflation for six years and inflation weakened for much of 2017.
“These directors judged that it would be appropriate to... assess whether incoming data support the outlook for continued moderate economic growth, further strengthening in the labour markets, and a gradual return of inflation to 2 percent over the medium term,” the minutes said.
The presidents of the Chicago and Minneapolis Federal Reserve banks subsequently voted against the interest rate rises at the December meeting and both have since reiterated their concerns on inflation.
St. Louis Fed President James Bullard did not have a vote on the rate-setting committee in 2017.
Reporting by Lindsay Dunsmuir; Editing by Andrea Ricci