Fed in March discussed ‘slightly steeper’ future rate hikes
WASHINGTON — Federal Reserve officials signalled rising confidence last month that a strong economy will lift inflation closer to its 2 per cent target and that they may accelerate the Fed’s pace of interest rate hikes as a result.
The minutes of the Fed’s March 20-21 meeting, which were released Wednesday, showed that a number of participants believed that a stronger outlook for economic activity plus rising inflation implied that the path for the Fed’s key interest rate in coming years could be “slightly steeper” than expected.
The minutes showed that some Fed officials felt it might eventually choose to revise the Fed’s policy statement to indicate a need to move past an “accommodative” level of rates to one that restrained economic activity slightly to keep inflation in check.
Private analysts noted that this discussion in the minutes marked the first time since the Great Recession that the central bank has discussed the possibility of adjusting interest rates to actually restrain economic growth.