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Fed officials less confident on the need for more rate hikes, minutes show

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Federal Reserve officials were divided at their last meeting over where to go with interest rates, with some members seeing the need for more increases while others expected a slowdown in growth to remove the need to tighten further, minutes released Wednesday showed.

Though the decision to increase the Fed's benchmark rate by a quarter percentage point was unanimous, the meeting summary reflected disagreement over what the next move should be, with a tilt toward less aggressive policy.

At the end, the rate-setting Federal Open Market Committee voted to remove a key phrase from their post-meeting statement that had indicated «additional policy firming may be appropriate.» The Fed appears now to be moving toward a more data-dependent approach in which myriad factors will determine if the rate-hiking cycle continues. «Participants generally expressed uncertainty about how much more policy tightening may be appropriate,» the minutes stated. «Many participants focused on the need to retain optionality after this meeting.» Essentially, the debate came down to two scenarios.

One that was advocated by «some» members judged that progress in reducing inflation was «unacceptably slow» and would necessitate further hikes.

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