Federal Reserve split on timing of next rate rise

Minutes from the US central bank’s last meeting show policy-makers divided over when the next rate rise should come.

According to the minutes, some Federal Reserve members felt “economic conditions would soon warrant taking another step”, while others believed more data was needed.The US central bank is widely expected to raise interest rates before the end of the year, but it is not clear when. At its July meeting, the Fed opted to hold rates between 0.25% and 0.5%.

The cost of borrowing in the US has been at that level since December 2015. Investors and traders were looking for clues in the minutes about whether that increase will come in September or at its final meeting in December. Most do not think the central bank will act at its meeting in November because the timing is too close to the US election.

“Members judged it appropriate to continue to leave their policy options open and maintain the flexibility to adjust the stance of policy based on incoming information,” the minutes said. “A couple of members preferred also to wait for more evidence that inflation would rise to 2% on a sustained basis,” the statement continued.