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Federal Reserve officials saw potential to be more hawkish if inflation persists

Jul. 06, 2022 2:36 PM ETBy: Liz Kiesche, SA News Editor28 Comments

Exterior of the US Federal Reserve Building in Washington DC


The Federal Reserve's policymakers judged that an increase of 50 or 75 basis points "would likely be appropriate at the next meeting," according to the minutes of the Federal Open Market Committee's June 14-15 meeting.

They also "recognized the possibility that

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Comments (28)

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Sunil Shah profile picture
V good interview and insights on Federal Reserve Mindset
An economist in the Central Bank (Bank of England) Mind is interviewed
Why the spectre of 70’s inflation will be prioritised over employment and equity markets in the progression of rate hikes.
A must listen, incredibly rare insights.
see link below.
Raoul Pal & Dario Perkins: A New Paradigm
see link here:


Basically Fed will continue to raise rates to redeem their gross neglect over last 2 years, DESPITE weakening economy, employment and slide in financial markets.
Gerrymander profile picture
"omitting the sentence about high uncertainty regarding the Ukraine-Russia conflict"....

good thing we're spending billions of $'s on an insignificant conflict that apparently has no real impact on humanity like we are being told....lmao
I have complete and full confidence in Chairman Powell, Speaker Pelosi, Minority Leader McConnell and President Joseph Robinette Biden Jr.

Who's with me?
I recommended dollar futures in May, and now everyone will understand how lucrative of a trade that has been. I am now recommending a allocation to gold and copper while these recession fears are around.
What is the point of more hikes? Will it solve our supply chain issues? No! The onus is on the politicians to work things out among themselves...
@Ruidanren it's trying to force people to stop spending. That's all these interest hikes do
@Ruidanren The situation in California with rules which MAY classify some independent truck owner-operators as employees bears some watching. I expect some job actions next week, likely at the ports.
Sunil Shah profile picture
"In particular, participants judged that an increase
of 50 or 75 basis points would likely be appropriate at
the next meeting. Participants concurred that the economic
outlook warranted moving to a restrictive stance
of policy, and they recognized the possibility that an
even more restrictive stance could be appropriate if elevated
inflation pressures were to persist."

Ishi Kenjo profile picture
@Sunil Shah They surprised last time. may again to front load this and avoid being too far behind inflation.
Diesel profile picture
Good thing inflation isn't persisting then. Commodities have been crashing lately.
SivBum profile picture
Next rate hike is 0.75% on 2022 FOMC Meetings; July. 26-27. (10% chance of 0.50% hike.)

At 2:39 PM ET, the CME FedWatch tool had a 90.3% probability of a 75-bp rate hike at the July FOMC meeting, up from an 83.8% probability a day earlier. There's no probability assigned for a 100-bp increase.
@SivBum agreed, they are just front loading as they started raising rate 9 months late ... but I see september being 25 or 50 bps max. Then I would not be surprised if they pause at 3.00%.
with prices of lumber, wheat, copper, new house permits, etc showing weakness, the Fed may have decided to ease off a bit. We'll see if it actually means anything. Housing permits are down 7% in a month, and about equal to June 2021.
fed put becoming fed call. oehs noes
Joe de Mencia profile picture
"With the potential for the firmer policy to slow the economy, the Fed officials removed language from the June policy statement that "indicated an expectation that appropriate policy would result in a return of inflation to 2% and a strong labor market.""

translation: soft landing not secured
06 Jul. 2022
@Joe de Mencia Urkle Fed: Did I do that???
Code Talker Market Analysis profile picture
I was hoping for a sustained "short cover the news" like what we saw for a minute after the release at 2pm.
Another blinding glimpse of the obvious from the behind the curve Fed....
ComputerBlue profile picture
Yawner fest...they want inflation high, all of the cb's do...the only way they can keep printing, and maintain elevated debt levels is with inflation...financial repression 101
Code Talker Market Analysis profile picture
I was hoping the Fed would express willingness to slow their hikes or taper if they saw recessionary signs.
ComputerBlue profile picture
@Code Talker Market Analysis the only way to tame inflation is with a recession...hence all of the recession talk in the media..
@Code Talker Market Analysis I suspect that if inflation remains high the fed will keep raising no matter what. If forced to choose to they will fight inflation and allow a recession to happen.
Code Talker Market Analysis profile picture
@ComputerBlue Another option would be to utilize toolsets outside of the Fed's control to work on energy costs.

However, I bet the Fed sees there is no courage or appetite within Congress or the White House to help there.
Wow, how exhilarating....Such informative meeting minutes....Not....
Philipsonh profile picture
Let us know when the Fed can alter the price of oil, which affects almost every other price.
BlueTower5000 profile picture
Basically a nothingburger. They may do this or that, yeah whatever. Markets still going down until they cry uncle and pause rates, probably end of Q3 or Q4 sometime.
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