Federal Reserve policymakers at their most recent meeting united around a strategy to “proceed carefully” on future interest-rate moves and base any further tightening on progress toward their inflation goal.
“All participants agreed that the committee was in a position to proceed carefully and that policy decisions at every meeting would continue to be based on the totality of incoming information,” according to minutes of the Oct. 31-Nov. 1 Federal Open Market Committee meeting released in Washington Tuesday.
US central bankers held the benchmark lending rate in a range of 5.25% to 5.5% for the second straight time, despite a run of data showing strong consumption and hiring, which fueled overall economic growth.
The minutes show the committee putting an emphasis on how higher interest rates were starting to squeeze households and businesses.
“There is a dovish tilt on the committee,” said Anna Wong, Bloomberg Economics’ chief US economist. “They want to sit there and let the tight level of credit conditions slow economic activity.”
Staff reports cited tighter lending standards across all consumer loan categories in the third quarter and rising delinquency rates.
“Several participants noted that an increasing number of district businesses were reporting that higher interest rates were affecting their businesses or that firms were increasingly cutting or delaying their investment plans because of higher borrowing costs and tighter bank lending conditions,” the minutes said.