US Fed dissenters call for rate hikes over sustained inflation
Three US Federal Reserve policymakers dissented from the decision to hold interest rates steady, arguing that immediate hikes are necessary to combat persistent inflation. The dissenters cite high energy prices and supply shocks as primary drivers of the current economic challenge.
Why it matters
Internal disagreement at the Fed signals potential volatility in future monetary policy and highlights the difficulty of managing inflation in a complex geopolitical climate.
AFP, Washington A cyclist passes the US Federal Reserve in Washington. Photo: Reuters/file All three US Federal Reserve policymakers who dissented from the central bank's decision to keep interest rates steady earlier this week said Friday that rate hikes were needed now in order to avoid entrenched inflation.
The Fed held rates at 3.50-3.75 percent for its fifth straight meeting on Wednesday, with three of the committee's 12 members dissenting in favor of a quarter-percentage-point rate hike.
That number of dissents is unusual and illustrative of the challenge the Fed faces in bringing inflation back down to its two-percent target -- a level it hasn't hit in more than five years.
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