Highlights of the Oct/Nov Fed discount meetings:
- 8 banks previously voted for hike
- Boston joins banks calling for hike
- New York, Chicago continued to call for no change
- Minneapolis continues to vote for a cut
"Federal Reserve Bank directors noted generally positive economic conditions, with economic growth expected to continue at a moderate pace."
Household spending had advanced further, and both the residential and commercial real estate sectors were strengthening.
Exports continued to lag
So the overall vote was 9 to hike and 3 to maintain/cut. The Fed board has been rejecting requests to hike the discount rate since September.
This is the rational for the hawks:
"Directors requesting an increase in the primary credit rate (to 1 percent) viewed a move toward a more normal level as appropriate in light of the improvements in labor market conditions this year and their expectations for inflation to rise gradually toward the Federal Reserve's 2 percent objective. Some directors favoring an increase judged that an earlier start to the policy normalization process could allow for a more gradual pace of adjustment, thereby limiting the associated risks."
Still, only three of the 9 regions voting for hikes this year have FOMC votes and 4 next year. If the Fed board is united against them, along with the New York Fed, that's 6 votes.
