At the US Federal Reserve’s (Fed) monetary policy meeting last month, some officials considered stopping interest rate hikes after two US banks unexpectedly went bankrupt and Fed staffers predicted that stress in the banking sector could push the economy into recession.
However, even the officials who made this assessment came to the conclusion that inflation continued to be high and therefore interest rates should be increased despite the risks.
The minutes of the Federal Open Market Committee’s policy meeting held on March 21 and 22, released yesterday evening, said, “Some participants… at the meeting discussed whether it would be appropriate to keep the target policy rate constant” to examine the effects of developments in the financial sector on loans and the course of the economy.
The Fed had increased the policy rate by 25 basis points to the range of 4.75% to 5% in March.
