WASHINGTON (Reuters) - Nine out of 12 regional Federal Reserve banks wanted 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 a discussion of the discount rate showed on Tuesday.
The U.S. central bank subsequently raised its benchmark lending rate by a quarter percentage point at its June 13-14 meeting and the discount rate to 1-3/4 percent.
Only the Federal Reserve Banks of Minneapolis, St. Louis and New York had urged the Fed’s board to maintain the discount rate at 1-1/2 percent, the minutes showed.
Seven of the nine banks that called for an increase in the discount rate also urged such action in late May and early June.
Directors at those banks cited a tight labor market as a factor “that would likely contribute to an increase in price pressures over time.”
The Fed decided to raise interest rates for the third time in six months at its June meeting on the strength of the U.S. jobs market and continued economic growth.
Reporting by Lindsay Dunsmuir; Editing by Andrea Ricci