Fed September minutes stop short of urging October rate hike

Most officials signaled another rate increase would likely be appropriate by year end

The Federal Reserve’s September meeting minutes, released Wednesday, offered no urgency for an interest-rate increase at the central bank’s upcoming October meeting, even as most participants signaled another move would likely be appropriate before year end, according to The Wall Street Journal.

“Most participants assessed that another increase in the target range for the federal-funds rate would likely be appropriate by year end,” the minutes said, as reported by WSJ economics correspondent Matt Grossman. “Participants emphasized, however, that they approached each meeting with an open mind and decisions at future meetings would depend on incoming information.”

The September rate increase had already telegraphed that officials had lost patience waiting for inflation to cool on its own, the WSJ reported, and the minutes confirmed there was broad agreement that the September hike would not be the last. The federal funds rate stood at 3.75% as of early October, according to Federal Reserve data.

Many officials viewed the September increase as a prudent step to guard against the risk that inflation would remain higher than anticipated. A smaller group of officials were more concerned still, saying their baseline forecast already includes inflation stiff enough to warrant the rate increase. Officials were unanimous in backing the September move, which was the central bank’s first rate increase in three years.

In the September dot plot, the majority of officials indicated they expect to raise rates once more this year, though some favored two more hikes and a couple favored none. Two key Fed policymakers — New York Fed President John Williams and Fed Vice Chair Philip Jefferson — hinted last week that the next rate increase should be expected in December rather than October, and the minutes said nothing to contradict that outlook.

Futures traders, based on their bets, see only one-in-five odds that rates will rise again at the October meeting, and that assessment barely changed after the publication of the September minutes.

Separately, U.S. crude oil inventories fell unexpectedly last week, according to data released Wednesday by the U.S. Energy Information Administration. Commercial crude oil stocks excluding the Strategic Petroleum Reserve fell by 3.2 million barrels to 424.1 million barrels in the week ended Oct. 2, about 1% above the five-year average for the time of year. A Wall Street Journal survey of analysts had expected crude stocks to increase by 1.7 million barrels.

British retailer Frasers Group, founded by billionaire Mike Ashley, bought 16.6 million shares in Baltimore-based Under Armour, representing 8.8% of the company, according to a regulatory filing. The stake is the latest deal in Frasers’s expansion strategy.

Pennsylvania’s Department of Health has tracked confirmed cases of measles since an outbreak began in April. According to the department, the accelerating outbreak is now the country’s biggest since 1991.