Fed Remains on Track to Raise Interest Rates Next Month
- 6 years ago
Fed Remains on Track to Raise Interest Rates Next Month
The officials “indicated that their decision about whether to increase the target range in the near term would depend importantly on whether the upcoming economic data boosted their confidence
that inflation was headed toward the Committee’s objective.”
Some Fed officials also want to raise rates because they are concerned
that financial market conditions have not tightened adequately this year, meaning credit is easier and cheaper to get than the Fed would have anticipated.
WASHINGTON — The Federal Reserve is preparing to raise its benchmark interest rate in December despite the concerns of some
Fed officials about the persistent weakness of inflation, according to an account of the Fed’s most recent policy meeting.
At the two-day meeting that ended Nov. 1, those officials were “reasonably confident
that the economy and inflation would evolve in coming months such that an additional firming would likely be appropriate in the near term,” the Fed said.
But the meeting account, released after a standard three-week delay, is likely to solidify investor expectations
that the Fed will raise rates by a quarter-point at the December meeting.
While some officials favored watching and waiting, a majority of Fed officials — including the chairwoman, Janet L. Yellen — have made clear
that they are inclined to keep raising the Fed’s benchmark rate.
They fear that the persistence of sluggish inflation could damage the economy, for example,
by permanently eroding public expectations about the future pace of inflation.
The officials “indicated that their decision about whether to increase the target range in the near term would depend importantly on whether the upcoming economic data boosted their confidence
that inflation was headed toward the Committee’s objective.”
Some Fed officials also want to raise rates because they are concerned
that financial market conditions have not tightened adequately this year, meaning credit is easier and cheaper to get than the Fed would have anticipated.
WASHINGTON — The Federal Reserve is preparing to raise its benchmark interest rate in December despite the concerns of some
Fed officials about the persistent weakness of inflation, according to an account of the Fed’s most recent policy meeting.
At the two-day meeting that ended Nov. 1, those officials were “reasonably confident
that the economy and inflation would evolve in coming months such that an additional firming would likely be appropriate in the near term,” the Fed said.
But the meeting account, released after a standard three-week delay, is likely to solidify investor expectations
that the Fed will raise rates by a quarter-point at the December meeting.
While some officials favored watching and waiting, a majority of Fed officials — including the chairwoman, Janet L. Yellen — have made clear
that they are inclined to keep raising the Fed’s benchmark rate.
They fear that the persistence of sluggish inflation could damage the economy, for example,
by permanently eroding public expectations about the future pace of inflation.