The Federal Reserve voted on July 29 to keep the discount rate unchanged at 3.75%, even as the federal funds rate decision showed a 9-3 split. Beth Hammack, Neel Kashkari and Lorie Logan supported a 25 basis point hike, citing inflation that remains above the Fed’s 2% target. Chair Kevin Warsh said in the meeting minutes that tighter monetary policy may be needed if inflation does not ease. The split decision highlights a cautious stance on the discount rate and deeper debate over the policy path ahead. Markets are now watching the next meeting, set for Sept. 15-16, for any increase in support for a rate hike.
The Federal Reserve voted on July 29 to keep the discount rate unchanged at 3.75%, even as the federal funds rate decision split 9-3.
Beth Hammack, Neel Kashkari and Lorie Logan backed a 25 basis point increase, saying inflation remains above the Fed’s 2% target.
Chair Kevin Warsh said in the meeting minutes that the Fed may need to tighten monetary policy in the future if inflation does not ease.
The vote shows broad agreement on holding the discount rate steady, but a more divided debate over the federal funds rate. Markets are now focused on the next meeting, scheduled for Sept. 15-16, to see whether more officials will support a hike.
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