Fed officials view another rate hike as ‘likely,’ meeting minutes show

The majority of Federal Open Market Committee (FOMC) officials believed another rate hike was on the horizon this year, according to minutes from the panel’s last meeting the central bank released Wednesday.

“With regard to the outlook for monetary policy beyond the current meeting, most participants assessed that another increase in the target range for the federal funds rate would likely be appropriate by year end,” the minutes from the Sept. 15-16 meeting noted.

At that meeting, the FOMC voted unanimously to raise interest rates by a quarter point, to a range of 3.75 percent to 4 percent, in a bid to rein in persistent inflation . Annual inflation has been above the Fed’s 2 percent target rate for five-plus years.

The 12-member committee will gather twice more before the calendar turns to 2027: Oct. 27-28 and Dec. 8-9.

Multiple FOMC officials have forecast future rate hikes since the panel’s last meeting, and 16 of 18 central bank officials projected at least one additional rate hike this year in the committee’s quarterly economic projections.

“In my base case, further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion,” Fed Vice Chair Michael Barr said last week at the Detroit Economic Club.

But two FOMC members, Fed Vice Chair Philip Jefferson and Federal Reserve Bank of New York President John Williams, recently said they may wait for more economic data before supporting another rate hike.

During an event last Thursday at the University of Virginia’s Darden School of Business, Jefferson said “any future adjustments in policy should be determined by carefully examining” data trends.

The meeting minutes reflected the sentiment, noting participants “emphasized” that “they approached each meeting with an open mind.”

Officials’ decisions at future meetings, the minutes stated, are dependent on “incoming information and its implications for the outlook and the balance of risks.”

One piece of information the Fed received was annual inflation for August, as measured by the personal consumption expenditures (PCE) price index. Year-over-year PCE inflation was 3.4 percent that month, according to data from the Bureau of Economic Analysis (BEA).

That marked a decline from 3.7 percent in July and was lower than the FOMC’s projection of 3.6 percent, which took into account the BEA’s new methodology , the minutes noted.

The decline in inflation coupled with the caution from Williams and Jefferson has 80.6 percent of traders pricing in a rate hold at the committee’s meeting later this month, according to the CME FedWatch tool .

President Trump has urged the central bank to cut interest rates , and he did so again Wednesday — while blaming the Fed for rising mortgage rates .

“You have a board that would like to see the country do badly, in my opinion, because I think interest rates should come down,” the president told reporters in the Oval Office, after praising Fed Chair Kevin Warsh as “great.”