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Two regional Fed banks urged raising discount rate before last meeting - minutes

Two regional Fed banks urged raising discount rate before last meeting - minutes
FILE PHOTO: The Federal Reserve building is pictured in Washington, DC, U.S., August 22, 2018. REUTERS/Chris Wattie   -   Copyright  Chris Wattie(Reuters)
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WASHINGTON (Reuters) – Two out of 12 regional Federal Reserve banks pushed for an increase in the rate commercial banks are charged for emergency loans ahead of the U.S. central bank’s last policy meeting, minutes from the discussion of the discount rate showed on Tuesday.

The Fed left its benchmark lending rate and the discount rate unchanged at its July 31 – Aug 1 meeting. Policymakers raised interest rates at the central bank’s previous policy meeting in June.

Investors expect another lift in borrowing costs when the rate-setting committee next meets in September.

Directors of the Federal Reserve banks of Cleveland and Kansas City made their requests for an increase in the discount rate by a quarter percentage point from its current 2-1/2 percent rate “in light of the outlook for continued solid economic growth, tight labour markets, and inflation remaining near…2 percent,” according to the minutes.

The 10 other regional Fed banks wanted to maintain the existing rate as they felt it appropriate for current economic conditions, the minutes said.

(Reporting by Lindsay Dunsmuir; Editing by Chizu Nomiyama)

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