US Fed closer to interest rate hike
Washington, Oct 13 (IANS) US Federal Reserve was closer to moving up interest rate, minutes of the Fed’s latest monetary policy meeting showed on Wednesday.
“Several (Federal Open Market Committee) members judged that it would be appropriate to increase the target range for the federal funds rate relatively soon if economic developments unfounded about as the Committee expected,” the minutes of the Fed’s September 20-21 meeting showed, Xinhua news agency reported.
“It was noted that a reasonable argument could be made either for an increase at this meeting or for waiting for some additional information on the labor market and inflation,” said the minutes.
The Fed kept its federal funds rate unchanged in its September meeting amid recent weak economic data and tepid inflation, but strongly signaled that the central bank could have one rate hike by the end of this year.
The minutes showed that policymakers still divided over their judgments about labor markets conditions.
“Participants generally expected the unemployment rate to run somewhat below their estimates of its longer-run normal rate over the next couple of years, but they offered differing views about the extent of slack that currently remained in the labor market,” said the minutes.
Some policymakers held there was limited or no slack in the labor market, while some others saw room for further improvement.
Some cautioned that a further delay in raising interest rate would increase the risk of the unemployment rate falling markedly below its longer-run normal level, thus calling for rapid rate increases which could dampen economic expansion.
According to the minutes, many policymakers noted that there were few signs of emerging inflationary pressures.
The US central bank is expected to hold next policy meeting on November 1 and 2, just a few days ahead of the US general election.
Analysts widely hold that the Fed would keep interest rate unchanged in its November meeting, while possibly hike the rate in December.