Directors at four Federal Reserve regional banks voted to increase the primary credit rate in the days before the Fed’s July meeting, discount rate minutes released Tuesday showed, providing fresh evidence of how divided the central bank was heading into that decision.
The directors of the Cleveland and Minneapolis Fed banks voted on July 16, 2026, and the directors of the Kansas City and Dallas Fed banks voted on July 23, to set the primary credit rate at 4%, a quarter-percentage-point increase from the existing level of 3.75%. The Board of Governors took no action on those requests and approved maintaining the rate at 3.75%.
At the July 28–29 joint meeting of the Board and the Federal Open Market Committee, policymakers voted to keep the federal funds target range at 3.5% to 3.75%. Three FOMC members dissented, according to Reuters. Regional Fed bank directors have no role in setting the federal funds rate and hold no FOMC seats, but they convene regularly with their bank presidents and those presidents say the directors’ perspectives inform their own policy thinking.
Notably, Kansas City Fed President Jeff Schmid lacked a voting seat on the FOMC this year, according to Reuters, so his bank’s directors pushed for a rate hike at a meeting where he was unable to cast a dissenting vote himself.
At the July 20 Board meeting — held the week before the FOMC convened — directors at ten Reserve Banks had voted to keep the primary credit rate at its existing level. Only the Cleveland and Minneapolis boards had at that point voted for an increase, and the Board took no action on those requests then either.
The three officials who dissented at the July meeting in favor of a rate increase were Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari, and Dallas Fed President Lorie Logan. All three argued the Fed needed to act to bring inflation back to its 2% target. Fed Chair Kevin Warsh, who sided with the majority, said the central bank had not abandoned its inflation goal but cautioned that elevated prices could not be resolved quickly.
The Board’s vote to hold at the July 29 meeting was unanimous. Voting for the action were Chairman Kevin Warsh, Vice Chair Philip Jefferson, Vice Chair for Supervision Michelle Bowman, and Governors Christopher Waller, Lisa Cook, Michael Barr, and Jerome Powell.
