The minutes of the Federal Reserve‘s July 25-26 meeting showed bank officials are divided over the need for further rate hikes.
According to the minutes, “some participants” pointed to the risks to the economy emerging from raising interest rates too much, while “most” policymakers continued to prioritize fighting inflation.
“The participants remained determined in their commitment to bring inflation down to the target rate of two percent,” the minutes read.
During the meeting, FOMC policymakers unanimously agreed to raise the overnight key interest rate at a range of 5.25 to 5.50 percent.
“Most participants continued to see significant inflation risks that may require further monetary tightening,” the minutes added.
Read: The Federal Reserve raises interest rates to the highest level since 2001
However, voices warning about the effects of continued monetary tightening appear to have played a more prominent role in the debate at last month’s policy meeting, an indication of the widening trend in the Federal Reserve as policymakers assess signs that inflation is falling and appreciate the potential damage to jobs and economic growth if interest rates rise to a higher rate than necessary.
“Two” respondents, for example, called for interest rates to remain unchanged in July.
Overall, the minutes said Federal Reserve policymakers agreed that the level of uncertainty remains high and that future interest rate decisions will rely on “aggregate” data in “the coming months to help illustrate how persistent inflation will slow.”
Wall Street indexes closed lower after the minutes showed bank officials were divided on the need to continue raising rates.
According to preliminary data, the S&P 500 fell 33.62 points, or 0.76 percent, to end trading at 4,404.24 points.
The Nasdaq Composite fell 156.59 points, or 1.15 percent, to 13,474.45, while the Dow Jones Industrial Average fell 179.86 points, or 0.51 percent, to 34,766.53.
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