"Minority Opinion for Interest Rate Hold in July FOMC Minutes"

Bloomberg News reported on the 16th (local time) that in the minutes of last month's Federal Open Market Committee (FOMC) meeting, where the benchmark interest rate was raised by 0.25 percentage points, the argument for keeping rates unchanged was a minority opinion.

Bloomberg Economics, Bloomberg's economic research institute, stated that it expects the sentiment among FOMC members to have become more dovish only after the July FOMC meeting concluded.

Bloomberg economists Anna Wing and Stuart Paul forecasted, "Members who argued for holding rates steady from July through the end of the year likely did so out of concern that further tightening could worsen credit conditions." They added, "Considering that Fed Chair Jerome Powell's tone at the press conference immediately following last month's regular FOMC meeting left open the possibility of both a rate hike and a pause, which was interpreted as more dovish, the Fed may adopt a more dovish stance in future monetary policy."

According to Bloomberg News, this observation suggests that public remarks by Fed officials since last month's meeting indicate that the firm consensus on the need for rate hikes has begun to weaken. Patrick Harker, President of the Federal Reserve Bank of Philadelphia, stated that "we have reached a point where we can patiently maintain rates steadily," while Fed Governor Michelle Bowman expressed that "if inflation progress stalls in upcoming data, we should be prepared for additional rate hikes."

Jerome Powell, Fed Chair. [Image source=AFP Yonhap News]

Investors, seeing employment and inflation indicators align with expectations, are anticipating that last month's hike will mark an early end to the Fed's tightening cycle. Bloomberg reported, "Investors do not expect further rate hikes this year, but if additional hikes occur, they are more likely to happen in November rather than September."

At last month's meeting, the Fed raised rates by 0.25 percentage points from 5.0?5.25% to 5.25?5.5%. As a result, the U.S. benchmark interest rate reached its highest level since 2001. The remaining FOMC meetings this year are only three: in September, November, and December, with the next FOMC scheduled for July 19?20.

This content was produced with the assistance of AI translation services.