Fed officials considered smaller rate hike last month, shows minutes

ISTANBUL

US Federal Reserve officials considered a smaller interest rate increase last month, according to the central bank's minutes released Wednesday.

The Fed raised its benchmark interest rate on March 22 by 25 basis points, carrying the federal funds rate to between 4.75% and 5% -- the highest since May 2006.

The central bank's decision came despite banking turmoil in the US.

Fed officials said in the minutes that recent developments in the banking sector weigh on economic activity and inflation. They "judged it prudent to increase the target range by a smaller increment at this meeting."

"These participants noted that doing so would also allow the Committee time to better assess the effects of banking-sector developments on credit conditions and the economy as the Committee moved toward a sufficiently restrictive stance of monetary policy," according to the minutes.