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Three Fed Presidents Recommend Interest-Rate Increase

Today, the Federal Reserve released the minutes of its Board of Governors meetings to discuss the United States’ monetary policy in April. In February, all

Jul 31, 2020
Today, the Federal Reserve releasedthe minutes of its Board of Governors meetings to discuss the United States’ monetary policy in April. In February, all twelve Federal Reserve regional bank presidents requested to keep the primary credit rate at 0.75 percent. In March, eleven banks voted for 0.75 percent, but the Federal Reserve Bank of Dallas voted to move to 1 percent. In mid-April, the heads of the Kansas City, St. Louis and Dallas banks all voted to establish a rate of 1 percent.
On one hand, this is no surprise. The three banks’ presidents are, respectively, Thomas Hoenig, James Bullard and Richard Fisher — all known as inflation hawks, more concerned with low rates leading to inflation than with high rates leading to unemployment. It is not a sign of an imminent rate increase either. (The Federal Reserve banks don’t set their own rates. Additionally, to be clear without getting too deep in the weeds here, the primary credit rateis different from the federal funds rate, and it impacts how much banks pay to borrow from the government rather than how much consumers pay banks for loans.)
Indeed, last month, for the sixteenth month in a row, the Federal Reserve recommendedkeeping the federal funds rate low for an “extended period”: “With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time. The Committee will maintain the target range for the federal funds rate at 0 to 0.25 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.”
Still, it demonstrates that more major figures within the Federal Reserve system are advocating a consideration of rate increases.
Dexter Cooke

Dexter Cooke

Dexter Cooke is an economist, marketing strategist, and orthopedic surgeon with over 20 years of experience crafting compelling narratives that resonate worldwide. He holds a Journalism degree from Columbia University, an Economics background from Yale University, and a medical degree with a postdoctoral fellowship in orthopedic medicine from the Medical University of South Carolina. Dexter’s insights into media, economics, and marketing shine through his prolific contributions to respected publications and advisory roles for influential organizations. As an orthopedic surgeon specializing in minimally invasive knee replacement surgery and laparoscopic procedures, Dexter prioritizes patient care above all. Outside his professional pursuits, Dexter enjoys collecting vintage watches, studying ancient civilizations, learning about astronomy, and participating in charity runs.
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