February 23, 2017
Federal Reserve meeting minutes released this week reveal a common perspective among Federal Open Market Committee’s participants. Many Fed officials believe an interest rate hike is coming “fairly soon,” in an effort to prevent an overheated economy.
The officials believe the economy is strong enough to withstand gradual interest rate increases. Another increase in the federal funds rate sooner is deemed “appropriate,” given the current confidence in the labor market and lack of inflationary pressure.
Officials discussed uncertainty on a range of issues at the most recent 2017 meetings, which took place Jan. 31-Feb. 1. Those included how the fiscal stimulus plans of Trump’s administration could play out to challenges posed by a rising dollar.
Traders have been pricing in a roughly one-in-three chance of a rate increase at the next Fed committee meeting in March 2017.
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