FOMC Minutes Highlight Uncertainty on Timing of Future Rate Hikes

The Federal Open Market Committee (FOMC) signaled that an interest rate increase is likely at next month’s meeting, but that the timing of increases over the next year is more uncertain. “Almost all participants expressed the view that another increase in the target range for the federal funds rate was likely to be warranted fairly soon,” read the minutes from the November 7-8 meeting. However, a few officials view further gradual increases in the target range of the federal funds rate as likely, but are unsure of the proper timing. Meeting participants emphasized that the future stance of policy should be guided by incoming data and their implications for the economic outlook.

Committee members have begun to place more attention on factors that could slow the economy more than expected, a change from meetings earlier in the year when more focus was placed on the possibility of the economy overheating. Possible areas of concern that were cited included uncertain trade policy, fading fiscal stimulus, and the lagged effects of reductions in monetary policy accommodation. During the meeting, committee members decided to maintain the federal funds rate target range at 2 to 2.25 percent. The Committee will next meet December 18-19.

Read the FOMC minutes.