The latest minutes from the Federal Reserve's monetary policy meeting show that most policymakers believe another interest rate hike may be needed before the end of this year to address persistent upside inflation risks.
US President Trump expressed strong dissatisfaction with this, criticizing the Federal Reserve Board for "wanting to see the country struggle," and once again called for rate cuts.
On Wednesday, US President Trump praised Federal Reserve Chairman Warsh for doing an excellent job, but said other members of the Federal Reserve Board want to see the United States perform poorly. The photo shows Trump (right) talking with the new Federal Reserve Chairman Warsh on May 22, the day of the swearing-in ceremony held at the White House. (Reuters file photo)
The minutes of the September meeting released by the Federal Reserve on Wednesday (October 7) show that although officials had raised the target range for the federal funds rate by 25 basis points to 3.75% to 4% at the mid-September policy meeting, there were still clear differences over the future path of interest rates and the reasons for raising them.
Most officials at the meeting believed that, given that inflation will remain elevated in the short term, another increase in the benchmark interest rate before the end of this year may be appropriate.
Some officials stressed that a rate hike would help block industry-wide price increases driven by energy market shocks and the artificial intelligence (AI) boom, thereby further easing inflation pressure.
But other officials pointed out that the current level of interest rates is only mildly restrictive, and the Federal Reserve must adjust policy in a timely manner based on the latest market information.
In addition, the meeting also held an in-depth discussion of the potential reasons behind the recent rise in long-term Treasury yields.
The Federal Reserve's tightening bias has triggered a strong backlash from the White House.
With the US 30-year mortgage rate hitting a near three-year high last week, Trump sharply criticized the Federal Reserve's decision-making on Wednesday when asked about mortgage rates in a media interview.
Trump also defended Federal Reserve Chairman Warsh, but said other Federal Reserve governors "want to see this country perform poorly," arguing that US interest rates should be lower.
US Treasury Secretary Bessent argued that current high interest rates are largely affected by a temporary shock caused by rising oil prices.
He pointed out: "Once we get through the current difficulties of the Iran conflict, energy market supply will be fully guaranteed, and inflation will then move toward the Federal Reserve's target, with mortgage rates and the 10-year Treasury yield falling accordingly."
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