The Federal Reserve is thinking of raising a key interest rate next month.
WASHINGTON — The Federal Reserve sent a sharp, simple message to financial markets Wednesday: Pay attention. The Fed is thinking seriously about raising its benchmark interest rate at its next meeting, in June.
The unusually frank bulletin was delivered in the official account of the Fed’s April meeting, which said explicitly that most officials thought “it likely would be appropriate” to raise rates in June if the economy had rebounded from a weak winter.
That message is sharply at odds with the expectations of investors, who have largely written off the chances of a June increase, betting instead that the Fed would leave rates unchanged until later in the year.
The Fed had voted 9-1 in April to keep rates unchanged while noting that threats from the global slowdown had eased.
The new signs that interest rates may be heading higher sent stocks flitting between gains and losses Wednesday, but the major indexes ended up closing pretty much where they started.
There is no certainty that the Fed will move at its meeting on June 14-15. The available economic data does not appear to show the strength that the Fed wants to see, and some officials said in April that there might not be time to gain the necessary confidence before the June meeting.
But the account made clear that Fed officials want markets to take the possibility much more seriously.
“The markets are certainly more pessimistic than I am,” Dennis Lockhart, president of the Federal Reserve Bank of Atlanta and a bellwether for the Fed’s policymaking committee, said Tuesday in Washington.
Two other Fed officials similarly said Tuesday that they were thinking about a June increase.
The April account said that some Fed officials were frustrated by the conclusions investors have drawn.
“Some participants were concerned that market participants may not have properly assessed the likelihood of an increase in the target range at the June meeting, and they emphasized the importance of communicating clearly,” it said.