Federal Reserve officials diverged at their June meeting about how aggressively they would be willing to cut interest rates, minutes from the June 17-18 monetary policy meeting showed. Policymakers largely held to a wait-and-see position on future rate moves, largely reflecting the stance that policy is well positioned to respond to any changes in data.
“Most participants assessed that some reduction in the target range for the federal funds rate this year would likely be appropriate,” the minutes said. But the level of required rate cuts varied. A “couple” officials said the next cut could come as soon as this month, while “some” thought no reductions this year would be appropriate. “Several” officials said they thought the current overnight funds rate “may not be far” from neutral.
“Participants agreed that although uncertainty about inflation and the economic outlook had decreased, it remained appropriate to take a careful approach in adjusting monetary policy,” the minutes stated. Officials also noted that they “might face difficult tradeoffs if elevated inflation proved to be more persistent while the outlook for employment weakened.”
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