US Federal Reserve policymakers are largely united on the need to raise borrowing costs further, minutes from their most recent policy meeting show, despite President Donald Trump's view that interest rate hikes have already gone too far.
Every Fed policymaker backed the central bank's September decision to raise the target policy rate to between 2.0 and 2.25 per cent, according to minutes of the September 25-26 meeting, published on Wednesday.
Participants in the Fed's rate-setting committee also "generally anticipated that further gradual increases" in short-term borrowing costs "would most likely be consistent" with the kind of continued economic expansion, labour market strength, and firm inflation that most of them are anticipating.
"This gradual approach would balance the risk of tightening monetary policy too quickly, which could lead to an abrupt slowing in the economy and inflation moving below the Committee's objective," the minutes said.
US stocks closed slightly lower and US Treasury yields gained a bit as traders continued to bet on further rate hikes ahead.
Trump told Reuters in August he was "not thrilled" with Federal Reserve Chair Jerome Powell for raising interest rates, and has since escalated his criticism, this week saying the central bank is his "biggest threat," and last week calling the Fed "crazy," "loco," "ridiculous," and "too cute."
"For now, the Fed has made it clear that they are focused on their agenda despite rising presidential pressure on their rate decisions," said Mike Loewengart, vice president of investment strategy at E*Trade.
The broadly united front could bolster expectations the central bank will raise rates a fourth time this year in December, but the minutes also show the committee remains split on how much further to raise rates next year.
A few participants expected rates would need to rise enough to modestly restrain economic growth, even as two others "indicated that they would not favour adopting a restrictive policy stance in the absence of clear signs of an overheating economy and rising inflation."
Fed officials overall expect rates to rise to 3.1 per cent next year and 3.4 per cent in 2020, just above their 3 per cent estimate for the long-run "neutral" rate at which borrowing costs are neither braking nor stimulating economic growth.
The US economy has been growing more quickly this year than many economists believe is possible without generating higher inflation, with the jobless rate at its lowest level in decades.
