By David Harrison
All but one of the Federal Reserve's 12 regional reserve banks wanted to raise the interest rate on discount-window loans ahead of the Fed's Dec. 13-14 meeting, according to minutes released Tuesday. At that meeting, Fed officials decided to raise both the central bank's benchmark federal funds rate and the discount rate.
In the days leading up to the meeting, boards of directors of 11 regional banks voted to raise the discount rate to 1.25% from 1% because of improving economic activity and labor-market conditions. Only the board of the Federal Reserve Bank of Minneapolis wanted to keep the discount rate steady arguing that would give anadded boost to the labor market and help the Fed reach its 2% inflation target.
When regional bank boards ask for discount-rate increases, it can sometimes signify a change in Fed officials' view on raising the central bank's federal funds rate, the overnight rate on loans between banks.
At earlier meetings, on Nov. 14 and Dec. 12, Fed officials had decided to hold the rate steady.
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(END) Dow Jones Newswires
January 10, 2017 14:13 ET (19:13 GMT)
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