The Fed's Ongoing Debate on Interest Rate Hikes

Federal Reserve officials were divided over whether additional interest rate hikes are needed to lower chronically high inflation, according to minutes from the U.S. central bank's May 2-3 meeting. While "several" participants noted that further policy firming may not be necessary, "some" policymakers suggested that additional policy firming would likely be warranted at future meetings. Despite the division, officials unanimously agreed to lift the federal funds rate for the 10th straight time to a range of 5% to 5.25%, the highest since 2007. Investors have been betting that the Fed would take a break in raising rates at its June meeting, but there is a growing contingent that expects the central bank to lift rates for the 11th time at the June 13-14 meeting.