The Federal Open Market Committee agreed that a strengthening economy supported “future gradual increases,” according to the minutes from the January 30-31 meeting. During the meeting, committee members decided to hold rates at 1.25 to 1.5 percent, after raising them in the December meeting. They penciled in three rate hikes in 2018 and two more in 2019. The Committee will next meet in late March.
The Committee noted greater confidence that inflation will reach their goal, largely due to tax reform and a tight labor market. “Almost all participants continued to anticipate that inflation would move up to the Committee’s 2 percent objective over the medium term as economic growth remained above trend and the labor market stayed strong; several commented that recent developments had increased their confidence in the outlook for further progress toward the Committee’s 2 percent inflation objective,” the minutes read.
This was the final policy meeting of Chairwoman Janet Yellen’s four-year term. Fed governor Jerome Powell was sworn in as chairman on Monday, February 5th.