The boards of directors of the Minneapolis and St. Louis Federal Reserve banks voted in mid-July for a full-percentage-point increase in the rate charged to commercial banks for emergency loans, minutes of their discount rate meetings showed on Tuesday.
Directors on the Kansas City Fed’s board voted for a half-percentage-point rate increase, the meeting showed.
The recommendations from all three banks were overruled when Fed policymakers at their July 26-27 policy meeting opted for a 75-basis-point increase to the benchmark policy rate. The Fed’s nine other regional bank boards had already backed a 75-basis-point increase in the discount rate.
The split among the Fed banks over the proper setting of the discount rate – which is different from but moves in tandem with the rate set by the Fed’s policy-setting Federal Open Market Committee – suggests increasing discord over how steep the U.S. central bank’s rate path should ultimately be. (Reporting by Ann Saphir; Editing by Paul Simao)