Federal Reserve Councils Split Over Interest Rate Hike
A division within the Federal Reserve has been exposed by recent minutes from regional bank councils meetings. Members of four out of 12 regional banks voted in favor of raising the interest rate on emergency loans, just days before the July meeting.
The votes came from members of the Dallas, Cleveland, Minneapolis, and Kansas City regional bank councils. Although they had previously voted for an interest rate hike during the July meeting, the president of the Kansas City Federal Reserve does not have voting rights this year.
The council's opinions help shape the assessment of economic forecasts and monetary policy by the heads of the regional banks. However, it is the Board of Governors who determines the discount rate in line with the targeted interest rate range for monetary policy.