(Reuters) - The heads of nine regional Federal Reserve banks voted last month to maintain the U.S. central bank’s emergency lending rate at 0.75 percent, against three who voted for a modest rise, minutes of Fed deliberations released on Tuesday showed.
The 9-3 breakdown ahead of the Fed’s March 18-19 policy-setting meeting was unchanged from voting ahead of a January policy meeting, suggesting comfort among most policymakers with the existing easy stance of U.S. monetary policy.
Meanwhile the Philadelphia, Kansas City and Dallas Fed banks, whose presidents are all among the Fed’s most hawkish policymakers, renewed their longstanding requests for an increase to 1.0 percent, the minutes said.
The discount rate is what the Fed charges banks who turn to the central bank for needed funds when they are unable to raise them in the private market.
The minutes of the Fed’s board discussions showed that part of the reason the three regional banks wanted to raise the discount rate was to bring the spread between it and the federal funds rate back to its pre-crisis level of 1 percentage point. The fed funds rate, which has been near zero since 2008, governs the cost of overnight borrowing between banks and is the Fed’s main monetary policy lever.
Overall, the Fed bank presidents “remained cautiously optimistic that the economy would continue to expand at a moderate pace, although most noted that severe winter weather had constrained recent economic activity,” according to the minutes.
“Although recent inflation readings were lower than the (Fed’s) longer-run goal, directors did not note a change in longer-term inflation expectations, which had remained stable,” they said. “Against this backdrop, most directors recommended that the current primary credit rate be maintained.”
Reporting by Jonathan Spicer; Editing by Andrea Ricci