Directors at four of the Federal Reserve’s 12 regional banks sought a quarter percentage-point increase in the discount rate in June, while the other outposts favored the decision to leave the rate unchanged last month.
(Bloomberg) — Directors at four of the Federal Reserve’s 12 regional banks sought a quarter percentage-point increase in the discount rate in June, while the other outposts favored the decision to leave the rate unchanged last month.
Minutes of discount-rate meetings from May 22 through June 14 released by the Fed Tuesday showed that directors at the Cleveland, Richmond, St. Louis and Dallas Fed boards wanted an increase.
Fed policymakers voted unanimously to hold their benchmark federal funds rate steady on June 14 at a target range of 5% to 5.25%, after raising rates 10 consecutive times since March 2022 to tame inflation. The Fed also left the discount rate, which governs the cost of borrowing by banks at its backstop lending facility, at the existing 5.25% rate.
The requests by the regional boards don’t necessarily mean the leaders of those banks supported that position, but the policy views of bank presidents often align with the bank’s directors.
The requests also shed more light on underlying divisions detailed in minutes from the Fed’s June meeting released last week. Those showed that some policymakers would have preferred to raise the federal funds rate by a quarter point last month, rather than pausing their tightening campaign.
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