Fed Rate Hike Divide: Four Regional Banks Backed Increase Before July Decision

The Federal Reserve's decision to keep interest rates unchanged in July has sparked debate within the central bank, with four regional banks backing a rate hike ahead of the policy meeting.

Minutes from the Dallas, Cleveland, Minneapolis, and Kansas City Federal Reserve banks' discount rate meetings, released on Tuesday, showed that directors at these institutions recommended raising the primary credit rate by a quarter of a percentage point.

The recommendations came just before the Federal Reserve's July 28-29 policy meeting, where policymakers voted 9-3 to maintain the benchmark interest rate. The regional banks' recommendations offer a fresh indication of the debate within the Fed system over the appropriate path for monetary policy.

The three regional banks whose directors supported the increase in Cleveland, Dallas, and Minneapolis were also represented by Fed presidents who dissented from the July policy decision.