At its July meeting, the Federal Reserve kept interest rates unchanged at 3.50–3.75 percent. The decision was made by a majority vote (9 against 3), with three Fed representatives voting for a rate hike, indicating a strengthening demand for tighter monetary policy within the bank.
Beth Hammack, Neel Kashkari, and Lorie Logan, who opposed the Federal Open Market Committee (FOMC) decision, supported raising the discount rate by 25 basis points. Although the policy statement contained no substantial changes compared to the June text, the fact that three committee members called for an interest rate hike emphasized the tough stance of the adopted decision.
The Federal Reserve stated that economic activity in the U.S. economy continues to grow at a high pace, while inflation remains above the 2% target level, partly due to the impact of recent shocks.
The statement noted that employment growth matched labor supply and that the unemployment rate had not changed significantly. It also emphasized that growth in labor productivity and capital investment remained high.
The Federal Reserve confirmed it will continue to maintain an adequate level of reserves in the banking system. The Open Market Committee stated it will continue to closely monitor economic data and risks in line with its goals of ensuring price stability and maximum employment.
*This is not investment advice.
