New York Fed among six banks voting in July for no change in discount rate

FILE PHOTO: The U.S. flag flies on the Federal Reserve Bank of New York in the financial district in New York City, U.S., March 4, 2019. REUTERS/Brendan McDermid

(Reuters) – Underscoring discord at the U.S. central over interest-rate policy, directors at half of the Federal Reserve’s regional Fed banks — including those at the influential New York Fed — wanted to keep the emergency lending rate for commercial banks unchanged in July.

Directors at the other six regional banks recommended a decrease to the so-called discount rate, records from the discussions showed on Tuesday.

Most of those wanted the quarter-point cut that the Fed ultimately decided on at its July 30-31 policy-setting meeting.

Minneapolis Fed directors wanted to go further, recommending a half-point cut to the rate.

Recommendations from regional Fed bank directors on the discount rate are not policy votes themselves, but often their votes reflect the view of their presidents.

Minneapolis Fed President Neel Kashkari has made public his support for a half-point interest-rate cut, exactly the recommendation from his bank.

Similarly Cleveland Fed Bank President Loretta Mester, whose directors joined those of New York, Boston, Atlanta, Richmond and Kansas City in wanting the discount rate to be left at its then-current 3%, said earlier this month that she opposed the Fed’s July rate cut.

Boston Fed President Eric Rosengren and Kansas City Fed President Esther George dissented against the Fed’s decision July 31 to cut its benchmark policy rate a quarter of a point to a range of 2%-2.25%.

New York Fed President John Williams, a close confidante of Fed Chair Jerome Powell, voted with the majority at the Fed to reduce the policy rate.

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Reporting by Ann Saphir; Editing by Chizu Nomiyama


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