FOMC Vot­ers Said Next Hike De­pends on In­fla­tion

The Bond Buyer - - Market News -

Many Fed­eral Re­serve pol­i­cy­mak­ers in their Septem­ber meet­ing wor­ried over whether re­cent low in­fla­tion read­ings this year were tran­si­tory and some said they wanted to feel more con­fi­dent that in­fla­tion was mov­ing higher be­fore rais­ing in­ter­est rates again.

Oth­ers ex­pressed con­cern over up­side risks for in­fla­tion given the tight­ness of the la­bor mar­ket, min­utes of the meet­ing showed Wed­nes­day.

The ac­count high­lights the range of opin­ions on the Fed­eral Open Mar­ket Com­mit­tee af­ter their pre­ferred mea­sure of in­fla­tion, the core per­sonal con­sump­tion ex­pen­di­tures price in­dex, de­cel­er­ated from a 1.9% an­nual pace ear­lier this year to just 1.4% in Au­gust.

“Many par­tic­i­pants thought that another in­crease in the tar­get range later this year was likely to be war­ranted if the medium-term out­look re­mained broadly un­changed,” the ac­count of the Sept. 1920 meet­ing said.

“Sev­eral oth­ers noted that, in light of the un­cer­tainty around their out­look for in­fla­tion, their de­ci­sion on whether to take such a pol­icy ac­tion would de­pend im­por­tantly on whether the eco­nomic data in com­ing months in­creased their con­fi­dence that in­fla­tion was mov­ing up to­ward the Com­mit­tees ob­jec­tive,” the min­utes said.

“A few par­tic­i­pants thought that ad­di­tional in­creases in the fed­eral funds rate should be de­ferred un­til in­com­ing in­for­ma­tion con­firmed that the low read­ings on in­fla­tion this year were not likely to per­sist and that in­fla­tion was clearly on a path to­ward the Com­mit­tees sym­met­ric 2% ob­jec­tive over the medium term.”

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