All of Fed’s 12 regional banks backed steady discount rate: minutes

February 26, 2019

WASHINGTON (Reuters) – All 12 of the U.S. Federal Reserve’s regional banks voted in January to hold steady the interest rate commercial banks are charged for emergency loans, minutes from discussions showed on Tuesday.

The unanimous vote to keep the Fed’s discount rate at 3 percent is a sign of the deep caution pervading the U.S. central bank.

The Fed signaled on Jan. 30 that it was putting on hold plans for future rate hikes given worries about a global economic slowdown and tense U.S. trade negotiations with China. Policymakers in recent weeks have stressed they will be patient on rate policy.

At a Jan. 22 meeting of the Fed’s Board of Governors, officials discussed the economic outlook and the views on discount rate policy submitted by the Fed’s regional bank directors.

“The directors judged that maintaining the current stance of monetary policy was appropriate for the time being in order to assess whether incoming data remained consistent with the outlook,” according to the minutes of the meeting.

The Fed’s governors appeared to echo that view: “No sentiment was expressed by the Board at today’s meeting for changing the primary credit rate at this time.”

A month earlier, the Fed had raised its benchmark overnight lending rate to a range of 2.25 to 2.50 percent while signaling future rate hikes were also likely.

(Reporting by Jason Lange; Editing by Andrea Ricci)

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