April 12, 2016 / 6:12 PM / 3 years ago

Two Fed bank presidents backed rate hike ahead of last meeting

Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, participates in a session titled, "Help or Harm: Central Bank Monetary Policies at the Outer Limits" NABE Economic Policy Conference in Washington March 5, 2013. REUTERS/Yuri Gripas

WASHINGTON (Reuters) - The heads of two regional Federal Reserve banks supported a rate hike ahead of the Fed’s March meeting as an improving economy added to sentiment to tighten monetary policy.

The heads of the Richmond and Kansas City Fed branches supported a quarter point hike in the main lending rates for banks “in light of continued improvements in labor market conditions and expectations that inflation would rise,” according to minutes of the Fed’s March discount rate meeting.

The discussion over discount rates preceded the Fed’s policy meeting held last month. The target federal funds rate was held steady at that session.

Kansas City Federal Reserve Bank president Esther George dissented, preferring to raise rates. Richmond Federal Reserve Bank president Jeffrey Lacker does not vote on the Fed’s main rate-setting committee this year.

Minutes of the last Fed policy meeting showed a broadening debate over when to hike rates next. Though an increase is considered unlikely when the Fed meets in April, steady progress on jobs and growth could set the stage for a hike in June.

Reporting by Howard Schneider; Editing by Andrea Ricci

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