Minutes of the Federal Reserve Discount Rate Meeting: Four regional Fed supports interest rate hikes

On August 26, minutes of the Federal Reserve's discount rate meeting released in the early morning of Wednesday showed that the boards of directors of four of the 12 regional Federal Reserve Banks voted to increase the interest rate charged for emergency loans to commercial banks a few days before the Federal Reserve's July meeting. The Federal Reserve's FOMC voted 9 - 3 to keep policy rates unchanged at its July 28 - 29 meeting, and the above recommendation further highlights how controversial this decision has caused internally. Those voting in favor of raising the primary credit rate by 25 basis points were the boards of directors of the Dallas Fed, Cleveland Fed and Minneapolis Fed, as well as the Kansas City Fed board. The chairmen of the first three regional Fed banks all voted against keeping interest rates unchanged at the July policy meeting. Kansas City Fed President Schmid has no vote this year. Regional Fed directors are not monetary policy makers and do not determine the Fed's interest rates, but they meet regularly with the chairmen of their respective regional Fed. Regional Fed chairmen said directors 'views help shape their own economic and policy outlook. Regional Fed boards vote on the discount rate at regular meetings, but the rate is ultimately set by the Federal Reserve Board of Governors to be consistent with the upper limit of the policy interest rate target range. Since December last year, the Fed's policy interest rate target range has remained at 3.5%-3.75%.