WASHINGTON—Minutes from the Federal Open Market Committee’s most recent meeting indicate that members will support another interest rate hike after two more months of “decent performance” in the labor market.
The FOMC last month voted to leave the federal funds target rate unchanged at a range of 0.25$ to 0.5%.
NAFCU Chief Economist and Director of Research Curt Long said the minutes revealed “stark divisions” in the committee as to how to proceed.
“With three dissenting voters, there is clearly a faction that wants to commence with rate hikes immediately,” Long said. “Even within the group that voted to maintain rates where they are, there is apparently one segment which sees a rate hike as imminent, and another which prefers a more cautious approach. The former likely provided the impetus to add a sentence to the Fed’s release stating that the case for raising rates had strengthened.”
Long added that another two months of “decent performance” from the labor market should be enough to prompt a rate hike in December.
The FOMC’s next two-day policy meeting is set for Nov. 1-2. The FOMC raised the federal funds target rate to a range of 0.25% to 0.5% in December 2015.