A united U.S. Federal Reserve agreed to hold interest rates steady at the June meeting as a way to buy time and assess whether further rate hikes would be needed, even as the vast bulk expected they would eventually need to tighten policy further, according to meeting minutes released on Wednesday.
While "some participants" wanted to move ahead with a rate hike in June because progress in cooling inflation had been slow, "almost all participants judged it appropriate or acceptable to maintain" the federal funds rate at the existing 5% to 5.25%, the minutes said.
Markets were little changed after the minutes, with traders in futures tied to the Fed policy rate continuing to price in a rate hike in July and about a one-in-three chance of another increase before the end of the year. The logic of waiting, whether it amounted to a "skip" of one meeting or turned into a longer pause, reflected what officials said was still deep uncertainty around whether the Fed had already raised rates enough to tame inflation -- and only needed to wait for the impact of tighter policy to be realized -- or still needed to lean on the economy harder.
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