Four Fed Banks Called for Higher Discount Rate in April

The number of Federal Reserve banks pushing the central bank to raise the rate it charges commercial banks for emergency loans rose to four in April from two in March, minutes from the Fed’s discount rate meeting released on Tuesday showed.

The Kansas City and Richmond Federal Reserve banks renewed calls for an increase in the Fed’s lending rate for banks ahead of the central bank’s last policy meeting, and were joined by Cleveland and San Francisco.

It is the second consecutive meeting at which the Kansas City and Richmond regional banks have pushed for an increase in the discount rate.

The Fed opted to hold the discount rate steady last month at 1 percent and held its main benchmark interest rate unchanged at the subsequent policy meeting on April 26-27.

Kansas City Fed chief Esther George and Cleveland Fed chief Loretta Mester are both voters this year on the main rate-setting committee.

Minutes from the April meeting released last week showed most officials considered it appropriate to raise rates in June if data continued to point to an improvement in second-quarter growth.

via Reuters

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