Jan 6 (Reuters) – Directors at two-thirds of the Federal Reserve’s regional banks voted to leave the interest rate charged to commercial banks for emergency loans unchanged ahead of last month’s Fed meeting, minutes of the central bank’s discount rate meetings showed on Tuesday.
The rate recommendations – overruled when Fed policymakers decided in a 9-3 vote to lower the policy rate by a quarter of a percentage point at their December 9-10 meeting – reveal another dimension to how contested that rate-cut decision was.
Sign up here.
Voting for a primary credit rate cut matching the Fed’s policy rate move were the directors of just four banks – New York, Philadelphia, St. Louis and San Francisco. The directors of all the other banks wanted to leave the rate, also known as the discount rate, at its existing level.
Voting against were directors of eight banks, including the Chicago and Kansas City Fed banks, whose presidents cast the two hawkish dissents on December’s policy vote.
Directors’ discount rate votes are often, but not always, done at the recommendation of the Fed bank president, and thus can be a guide to that policymaker’s view.
But directors at the Boston Fed also voted to leave the discount rate unchanged. Boston Fed President Susan Collins ended up voting for the policy rate cut on December 10, a decision she later said was a
Majority of Fed banks voted against December change to discount rate
