Fed sees strengthening economy, inflation
WASHINGTON: All of the Federal Reserve’s policymakers felt that the US economy would firm further and that inflation would rise in the coming months, minutes of the central bank’s last policy meeting on March 20-21 released showed.
The readout of the meeting, at which the Fed unanimously voted to raise borrowing costs by a quarter percentage point, also showed that policymakers were wary about the impact of the Trump administration’s trade and fiscal policies.
“All participants agreed that the outlook for the economy beyond the current quarter had strengthened in recent months,” the Fed said in the minutes. “In addition, all participants expected inflation on a 12-month basis to move up in coming months.”
US stocks, Treasuries and the dollar were little changed following their publication.
“From a market sense there’s not much for people to take away here, they are still looking for a gradual pace of hikes. I think the debate rages on whether that means three this year of four this year,” said Gennadiy Goldberg, an interest rates strategist at TD Securities in New York.
The Fed’s target range for its benchmark lending rate is currently between 1.50 and 1.75 per cent. The increase in March was the sixth rise since the central bank began a tightening cycle back in December 2015.
As the economy has strengthened, the Fed has upped the pace of hikes. It sees another two rate rises this year, although quarterly forecasts at the last meeting showed more officials than in December were supportive of three more hikes in 2018.— Reuters