Fed minutes show general support for 3rd rate hike this year
WASHINGTON — Federal Reserve officials generally believe that it’ll soon be time for another increase in the Fed’s key interest rate. However, a few felt any further rate hikes should be delayed until they see inflation moving higher, minutes of their last meeting revealed.
Minutes of the Fed’s Oct. 31-Nov. 1 meeting released Wednesday showed that many officials believed a third rate hike this year will likely be warranted if incoming data leave the medium-term economic outlook unchanged. But “a few” officials remained worried that inflation has failed to accelerate toward the Fed’s 2 per cent goal as expected. They suggest that the central bank needs to remain cautious in pushing rates higher.
The Fed meets again on Dec. 12-13, and private economists widely expect it will go ahead and raise rates.
“A December rate hike is still the most likely outcome,” said Paul Ashworth, chief U.S. economist at Capital Economics. Ashworth said the minutes did show that Fed officials are still struggling to solve the mystery of why wage growth and underlying price inflation have remained so low with an unemployment falling so low.