By The Federal Reserve might increase a key U.S. interest rate by 1/2-point increments at upcoming meetings if inflation remains high or gets even worse, according to minute of the central bank’s last strategy session in March.
“Many participants noted that one or more 50 basis point increases in the target range could be appropriate at future meetings, particularly if inflation pressures remained elevated or intensified,” the minutes of the Fed’s meeting showed.
“Many” senior Fed officials were also prepared to raise the bank’s benchmark rate by 50 basis points in March, the minutes revealed, but the Russian invasion of Ukraine persuaded them to take a more cautious stance.
The Federal Open Market Committee lifted its benchmark fed funds rate by a quarter point instead — from near zero to a range of 0.25% to 0.5%.
The rate had been kept near zero since early in the pandemic to cushion the U.S. economy from a deeper recession.
The minutes also indicated the central bank begins to start reducing its $9 trillion balance sheet as early as May.
