Federal Reserve officials were split in March on the possibility of raising interest rates at the central bank’s June monetary policy meeting, minutes from the March meeting released Tuesday show.
Only “several” Fed members thought that the economy would be strong enough to raise rates in June, according to the minutes. The others “anticipated that the effects of energy price declines and the dollar’s appreciation” would keep expected inflation below the Fed’s target, delaying a rate increase. Two participants, neither of whom is named in the minutes, thought a rate hike wouldn’t come until 2016.
The March meeting took place before the bad news in the March jobs report was known.
The central bank, under the management of Chairwoman Janet Yellen, is considering raising its target for short-term interest rates from zero for the first time since 2008. In its March policy announcement, the monetary policy committee said that it would raise rates when it was “reasonably confident” that inflation will move toward its 2 percent goal in the medium term.
In recent months, many measures of inflation have been running well below 2 percent. Prices have been pushed down largely by falling oil prices and also by falling import prices as the dollar has appreciated against other currencies.
Yellen clarified in March that the Fed would not move to raise rates at its April meeting, but that the decision could come at any of the later meetings. Wednesday’s release of the minutes suggest that a rate hike at the June meeting is also unlikely.
Current bond market prices indicate that investors expect the Fed to raise rates sometime after September.
