Even inflation hawks are voting to hold off another rate hike

No rate hikes just yet.
(Image credit: Mark Wilson/Getty Images)

The Federal Reserve announced on Wednesday that it will hold interest rates steady at 0.25 to 0.5 percent. It made the same choice back in January, after raising rates off the 0 to 0.25 percent floor in December.

This was how the 10 voting members on the Fed were widely expected to rule, but the vote breakdowns are interesting. Both the December and January decisions were unanimous. Today's vote included one dissenter, who wanted to hike again to the 0.5 to 0.75 percent range. What's striking is that even Stanley Fischer, who is arguably the ring-leader of the Fed's inflation hawks, was one of those voting to hold fire.

The lone dissent by Esther George could be seen as a sign that the January agreement to hold off is cracking. But a gradual rise in interest rates this year is also largely seen as a fait accompli, and their next chance to hike interest rates another notch will come in June. And there aren't that many Fed meetings each year. So it seems equally possible that hiking rates in December — on the assumption that inflation and wages would continue increasing as the economy gains strength — is something even the hawks are having second thoughts over.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up
To continue reading this article...
Continue reading this article and get limited website access each month.
Get unlimited website access, exclusive newsletters plus much more.
Cancel or pause at any time.
Already a subscriber to The Week?
Not sure which email you used for your subscription? Contact us
Jeff Spross

Jeff Spross was the economics and business correspondent at TheWeek.com. He was previously a reporter at ThinkProgress.