Kansas City Fed favored hiking discount rate in September: minutes

WASHINGTON (Reuters) – The Federal Reserve Bank of Kansas City in September voted to raise the rate commercial banks are charged for emergency loans, according to minutes of a U.S. central bank meeting released on Tuesday.

The Fed ultimately held interest rates steady at its Sept 19-20 policy meeting. But the minutes released on Tuesday for a Sept. 20 meeting on discount rate policy suggest the sentiment for holding policy unchanged was not unanimous.

The U.S. central bank has 12 regional divisions in addition to its Washington-based Board of Governors.

Eleven of the 12 regional Fed banks voted in favor of keeping the Fed’s discount rate steady at 1 3/4 percent, with the Kansas City Fed voting for a hike to 2 percent, according to the minutes.

The discount rate, charged on emergency loans, usually moves in lockstep with the central bank’s main target rate for interbank lending, which is currently a range of between 1 percent and 1 1/4 percent.

The Fed is widely expected to raise interest rates in December.

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