The United States Federal Open Market Committee (FOMC) revealed in its minutes from the meeting held on January 31 and February 1 that the extent of future raises in interest rates will depend on "the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial development."
The Fed once again reaffirmed its dedication to bringing inflation down to its target of 2% and stressed further hikes will be "appropriate" to achieve that. The committee also noted that, while all of its members unanimously supported raising the key rate by 25 basis points (bps) to 4.50%-4.75%, there were some that were in favor of hiking it by 50 bps.
Those in favor of 25 bps noted the slowing in the pace would "allow them to assess the economy's progress toward the Committee's goals of maximum employment and price stability." Those in favor of a 50 bps hike insisted that such a raise would bring inflation closer to its target more quickly.
