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Disagreement on Policy Decision Among Four Fed Bank Boards Before March Rate Hike

The directors of four of the twelve Federal Reserve regional banks did not agree with the quarter-percentage-point interest rate increase implemented by the U.S. central bank in March. The Fed's minutes from the meeting did not clarify whether these banks preferred a pause or a larger hike.

FED building
FED building

Fed Bank Directors' Role in Monetary Policy Decisions

Although Fed bank directors do not vote on monetary policy, they share their views through non-binding votes on the discount rate, the rate charged to commercial banks for emergency loans. Fed bank presidents assert that their directors contribute essential information about the economy's condition.

Preferences of Cleveland, Chicago, St. Louis, and Minneapolis Fed Banks

The preferences of the boards at the Cleveland, Chicago, St. Louis, and Minneapolis Fed banks regarding the March 21-22 meeting remain unknown until separate minutes of their meetings on the discount rate are published, which typically occurs the following week.

Goolsbee and Kashkari Vote in Favor of Benchmark Overnight Rate Increase

Despite their boards' differing preferences, Chicago Fed President Austan Goolsbee and Minneapolis Fed President Neel Kashkari unanimously voted with other Fed policymakers to raise the benchmark overnight interest rate to the 4.75%-5.00% range in the last month.

Calls for "Patience" on Rate Hikes from Goolsbee

Chicago Fed President Austan Goolsbee has called for "patience" regarding future rate hikes.

St. Louis and Cleveland Fed Presidents Favor Tighter Policy

St. Louis Fed President James Bullard and Cleveland Fed President Loretta Mester, who do not cast policy votes this year, have preferred tighter policy to combat high inflation.

Fed Meeting Minutes Reveal Policymaker Sentiments on Rate Increases

The minutes from the Fed's meeting last month they were revealed that "several" policymakers considered pausing interest rate increases but changed their minds after witnessing how emergency backstops and other measures had stabilized conditions. The minutes do not specify which policymakers made which comments.

Some Policymakers Considered Larger Rate Hike

According to the minutes, "some" policymakers would have considered a half-percentage-point increase if not for the banking sector stress.