Fed Officials Weigh Rate Hike Amid Inflation Risks
Pressure is building within the Federal Reserve to increase interest rates for the first time in over two years. This comes as officials weigh renewed inflation risks from the Middle East conflict, which has exposed a growing divide within the central bank.
The decision to hold the benchmark rate steady at 3.5-3.75% was unusual, with three regional bank presidents dissenting in favor of an increase. The last time this happened was over a decade ago.
Several Fed officials have warned that they may be forced to raise rates if inflation doesn't show sustained signs of slowing. Lorie Logan, the Dallas Fed president and one of the dissenting votes, has already called for increasing rates in a mid-July speech.
Beth Hammack, the Cleveland Fed president who also voted for an increase, wrote that inflation is 'unduly high' and 'isn't coming from only one source, it's broad based.'