The Federal Reserve (Fed) is preparing for further rate hikes in its meeting at the end of September, with the tightening that will continue until inflation subsides substantially. Several participants, however, highlighted the risks of excessive monetary tightening and predict that a slowdown in monetary policy normalization will be appropriate at some point. These are two of the main points that emerge from the minutes of the FOMC relating to the meeting of 26-27 July, published yesterday evening. In the last meeting at the end of July, an increase in interest rates of 75 basis points was announced, bringing them in the range between 2.25% -2.50%.
“Participants felt that, in light of further tightening of monetary policy, it would become appropriate at some point to slow down the pace of rate hikes,” the Fed’s minutes read, stating that the extent of tight futures will depend on information and updates to come on the economic outlook.