Fed signals rate increase soon

by Ryan Smith22 Aug 2018

Another interest-rate hike may be coming soon, according to the minutes of the Federal Reserve’s last policy meeting.

The minutes, released Wednesday, showed the Federal Open Market Committee discussing the possibility of raising rates soon to counter excessive economic strength, according to a Reuters report.

The Fed left rates unchanged after its July 31-Aug. 1 meeting, but policymakers are concerned that the economy is so strong that inflation could rise about the Fed’s 2% target.

“Many participants suggested that if incoming data continued to support their current economic outlook, it would likely soon be appropriate to take another step in removing policy accommodation,” the minutes said.

Fed officials predicted that the economy would grow at a fast enough rate to put upward pressure on inflation, Reuters said.

The Fed has raised rates twice so far this year, and two more rate hikes are widely expected before the end of 2018.

 

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