Fed Bank Boards Divided on Rate Hike Ahead of July Meeting

The Federal Reserve's July meeting saw a contentious decision to leave interest rates unchanged. According to minutes released on Tuesday, August 25, four of the Fed bank boards voted in favor of raising the rate charged to commercial banks for emergency loans.

The directors at the Dallas, Cleveland, and Minneapolis Feds, as well as those at the Kansas City Fed, recommended a quarter-point increase. This decision was ultimately overruled in a 9-3 vote by Fed policymakers on July 28-29.

Fed bank directors do not determine interest rates but provide input to their respective presidents, which can shape their views. The discount rate is set by the Fed Board to match the top of the policy target range, currently between 3.5% and 3.75%