Three Fed bank boards wanted smaller discount rate hike

(Reuters) – Directors at three of the Federal Reserve’s 12 regional banks supported a smaller increase in a key emergency borrowing rate than the 75-basis point rate hike the U.S. central bank ultimately approved in early November, minutes of Fed discount rate meetings showed on Tuesday.

At meetings held a week or two before the Fed policy-rate decision, directors on the Kansas City, Philadelphia and New York Fed boards sought a half-percentage-point increase in the discount rate, the minutes showed.

Those at the other nine banks backed a 75-basis point hike, which was the increase Fed policymakers decided on at their Nov. 2-3 meeting. None supported a 100-basis point hike as at least one bank board did before each of the prior two Fed meetings.

Fed bank boards do not set the policy rate, but do meet regularly to vote on the discount rate, which moves in tandem with the policy rate.

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