Two Fed banks wanted discount rate hike in June

Two regional Federal Reserve banks, Kansas City and Dallas, continued to push for a modest increase in the rate charged to banks for emergency loans, according to minutes from a June meeting.

The Fed has kept the discount rate unchanged at 0.75 percent, though directors of the Kansas City and Dallas Fed boards have requested an increase to 1 percent. St Louis Fed board members dropped earlier calls for an increase.

Regional Fed directors cited evidence of a moderate economic recovery, but maintained a cautious outlook due in part to a weak job market.

Although the labor market showed signs of gradual improvement, directors generally expected hiring to remain subdued, the minutes said.

(Reporting by Pedro Nicolaci da Costa)