WASHINGTON, Feb 27 (Reuters) - Only the Federal Reserve Bank of Dallas 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 Jan. 30-31 meeting. Policymakers raised interest rates at the central bank’s previous policy meeting in December 2017 and investors expect another nudge upwards in its lending rates when the rate-setting committee next meets in March.
Directors at the Dallas Fed made their request for an increase in the discount rate by a quarter percentage point from its current 2 percent rate due to “solid growth, tight labor-market conditions, and an expected rise in inflation toward 2 percent,” according to the minutes.
The 11 other regional Fed banks wanted to maintain the existing rate while they assessed whether incoming data supported their economic outlooks on growth, unemployment and inflation.
The Fed has missed its 2 percent target rate on inflation for almost six years but recent readings have shown an uptick in pricing pressures while the Trump administration’s added stimulus of tax cuts and government spending are also expected to juice the economy.
Reporting by Lindsay Dunsmuir, Editing by Andrea Ricci