US Fed sees need for cumulative policy tightening in August

US Federal Reserve officials had seen the need for more rate hikes over one month before they boosted the federal funds rate for the third time this year two days ago, a document released Thursday showed.

The document was the summary of the Aug. 10 meeting of the Fed's monetary policy decision arm, the Federal Open Market Committee (FOMC).

"Given the current quite low level of short-term rates, especially when judged against the recent level of inflation, members noted that significant cumulative policy tightening likely would be needed to foster conditions consistent with the FOMC's objectives for price stability and sustainable economic growth," the summary said.

FOMC members, in general, were upbeat about the economy's future prospects, according to the summary. They agreed that the slowdown in the second quarter would be "short-lived" and the weak labor market would improve.

At the Aug. 10 meeting, the FOMC raised the federal fund rate, which commercial banks charge each other on overnight loans, by a quarter of one percentage point to 1.5 percent.

The FOMC ordered its first rate rise in four years on June 30, raising the federal funds rate from a 46-year low of one percent to 1.25 percent.

Source: Xinhua