Against a backdrop of tightening credit conditions and higher interest rates expected to continue weighing on the economy, Federal Open Market Committee members decided to maintain the target range for the federal funds rate at 5% to 5.25%, according to minutes from the committee’s June meeting. Participants acknowledged that a pause in rate hikes would provide time to assess the economy’s progress toward the committee’s goals of maximum employment and price stability.
FOMC members continued to agree that a restrictive stance for monetary policy would be appropriate in order to achieve those objectives. “Almost all participants stated that, with inflation still well above the committee’s longer-run goal and the labor market remaining tight, upside risks to the inflation outlook or the possibility that persistently high inflation might cause inflation expectations to become unanchored remained key factors shaping the policy outlook,” the minutes noted.
