Discount Rate Minutes: 8 Banks Wanted Hike

Twice as many Federal Reserve Banks wanted to raise the discount and advance rate under the primary credit program as wanted to keep the rate at 1%, according to minutes of the Federal Reserve Board's discount rate meeting, released Tuesday.

The rate was held.

New York, Minneapolis, Atlanta and Chicago voted to keep the rate at 1%, while Boston, Cleveland, Richmond, San Francisco, Philadelphia, St. Louis, Kansas City and Dallas wanted to raise the rate to 1.25%.

The Bank directors said the economy was expanding "at a moderate pace, though their reports varied somewhat across different sectors and Districts," according to the minutes.

Specifically named in the report, housing was rebounding and consumer spending was "steady or increasing," according to several directors.

The impact of the Brexit vote was termed "limited" for now, but "some" directors express concern about "increased uncertainty" resulting from events.

Exports stayed weak, while labor market indicators showed improvement overall, despite some "variability in recent job gains."

The directors wanting to keep the rate at 1% "judged that the economic outlook and below-target inflation supported maintaining the current accommodative stance of monetary policy," the minutes said. Those seeking an increase, felt "actual and expected strengthening in economic activity and … expectations for inflation to gradually move toward the 2 percent objective," supported the request.

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