Federal Reserve policymakers believe another increase to the benchmark interest rate will likely be necessary by the end of the year, according to newly released meeting minutes.
At the September meeting of the rate-setting Federal Open Market Committee, Fed Chair Kevin Warsh joined the unanimous 12-0 vote in favor of raising the overnight interest rate to a range of 3.75% to 4%, marking the first rate increase in more than three years.
The move came in defiance of President Donald Trump’s longstanding calls for lower rates, which stimulate the economy and reduce government borrowing costs. However, members of the FOMC judged inflation to be a resurgent threat and responded with the rate hike.
Mortgage rates have already surged to a three-year high of more than 7% in recent weeks amid a global bond selloff, and minutes from the September meeting released on Wednesday suggest that the Fed’s work isn’t done.
“With regard to the outlook for monetary policy beyond the current meeting, most participants assessed that another increase in the target range for the federal funds rate would likely be appropriate by year end,” the minutes state.
Developing story, more to follow.
Get real estate news in your inbox
Keith Griffith is a senior news editor at Realtor.com covering housing policy, real estate news, and trends in the residential market. Previously, his work has appeared in Business Insider, The Street, Chicago Sun-Times, New York Post, and Daily Mail, among other publications. He has a master’s degree in economic and business journalism from Columbia University.
