FOMC Minutes: Conditions For Rate Hike Could Be Met Soon

The minutes of the 14-15 December FOMC meeting, released on Wednesday, said most participants judged conditions for rate hike could be met soon.

According to FOMC Minutes, recent high levels of inflation will raise the public’s longer-term inflation expectations to levels higher than those consistent with the committee’s longer-run inflation aim.

“It may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated. Some participants also noted that it could be appropriate to begin to reduce the size of the Federal Reserve’s balance sheet relatively soon after beginning to raise the federal funds rate. Some participants judged that a less accommodative future stance of policy would likely be warranted and that the Committee should convey a strong”, the minutes added.

Policy makers highlighted that, given the outlook for the economy, labour market, and inflation, it may become necessary to raise the federal funds rate sooner or at a faster rate than participants had previously anticipated.

US stocks wavered in Wednesday trading with investors looking ahead to minutes from the Federal Reserve’s recent policy meeting in the hope of gleaning fresh clues about plans to wean markets off pandemic-era stimulus measures, and market reactions are expected to be posted during the remaining hours of the North America trading session.