Fed minutes indicate multiple 50 basis points rate hikes on horizon

By Ovunc Kutlu

ANKARA (AA) – The US Federal Reserve's minutes from its last meeting indicated Wednesday that multiple 50 basis points of interest rate increases are on the horizon for the central bank.

"Most participants judged that 50 basis point increases in the target range would likely be appropriate at the next couple of meetings," the bank said in the minutes from its May 3-4 meeting.

The Federal Open Market Committee (FOMC) unanimously decided on May 4 to raise the benchmark interest rate by 50 basis points to the target range between 0.75% and 1%.

This marked the first time the central bank made a 50 basis points hike since 2000 in order to fight against record-high inflation.

Some participants of the FOMC emphasized that "persistently high inflation heightened the risk that longer-term inflation expectations could become unanchored; in that case, the task of returning inflation to 2% would be more difficult," the minutes said.

"Various participants noted downside risks to the outlook, including risks associated with the Russian invasion and COVID-related lockdowns in China and the likelihood of a prolonged rise in energy and commodity prices," it added.