8 Apr 2015
FOMC minutes: Several members anticipate June hike
FXStreet (Córdoba) - Minutes from the March 17-18 FOMC meeting showed members remain split on the timing for the “liftoff”.
Several members judged economic data will likely to warrant June hike, while others anticipate initial rate hike more likely later in 2015 due to impact of US dollar and oil prices.
"Several participants judged that the economic data and outlook were likely to warrant beginning normalization at the June meeting. However, others anticipated that the effects of energy price declines and the dollar's appreciation would continue to weigh on inflation in the near term, suggesting that conditions likely would not be appropriate to begin raising rates until later in the year, and a couple of participants suggested that the economic outlook likely would not call for liftoff until 2016."
Minutes showed the Federal Reserve aims for a “fairly gradual pace of normalization” or that a data-dependent approach would not necessarily dictate increases in the target range at every meeting.
Regarding the state of the economy, members noted economic growth had moderated somewhat although labor market conditions improved further, with strong job gains and a lower unemployment rate. However, minutes are previous to the latest dismal nonfarm payrolls report, which showed the economy added only 126,000 jobs in March versus 245,000 expected.
FOMC participants noted inflation declined further below the Committee's longer-run objective, largely reflecting the declines in energy prices.
Fed members also discussed the strong dollar, with several officials noting that it "was likely to restrain US net exports and economic growth for a time."
Several members judged economic data will likely to warrant June hike, while others anticipate initial rate hike more likely later in 2015 due to impact of US dollar and oil prices.
"Several participants judged that the economic data and outlook were likely to warrant beginning normalization at the June meeting. However, others anticipated that the effects of energy price declines and the dollar's appreciation would continue to weigh on inflation in the near term, suggesting that conditions likely would not be appropriate to begin raising rates until later in the year, and a couple of participants suggested that the economic outlook likely would not call for liftoff until 2016."
Minutes showed the Federal Reserve aims for a “fairly gradual pace of normalization” or that a data-dependent approach would not necessarily dictate increases in the target range at every meeting.
Regarding the state of the economy, members noted economic growth had moderated somewhat although labor market conditions improved further, with strong job gains and a lower unemployment rate. However, minutes are previous to the latest dismal nonfarm payrolls report, which showed the economy added only 126,000 jobs in March versus 245,000 expected.
FOMC participants noted inflation declined further below the Committee's longer-run objective, largely reflecting the declines in energy prices.
Fed members also discussed the strong dollar, with several officials noting that it "was likely to restrain US net exports and economic growth for a time."