Door open for more rate hikes if economy improves

Federal Reserve officials at their most recent meeting left room for the possibility of interest rate increases before the end of the year, should economic conditions improve, according to minutes through the session released Wednesday.

The central bank’s Federal Open Market Committee voted unanimously to not raise its benchmark rate at the March 19-20 gathering, along with simultaneously indicated which This particular didn’t see a likelihood for any hikes through 2019.

However, which came after a discussion in which members said they would likely be watching the data on an economy most of them anticipated to improve through the year.

“Several participants noted which their views of the appropriate range for the federal funds rate could shift in either direction based on incoming data along with different developments,” the meeting summary stated. “Some participants indicated which if the economy evolved as they currently expected, with economic growth above its longer-run trend rate, they would likely likely judge This particular appropriate to raise the target range for the federal funds rate modestly later This particular year.”

The suggestion of a modest move implies one quarter-point adjustment from the current target range of 2.25 percent to 2.5 percent. Futures markets are currently pricing in no chance of an increase along with in fact a 55% chance which the Fed might choose to cut rates. The expectation for a rate cut following the minutes can be “probably just wishful thinking,” said Robert Frick, corporate economist at Navy Federal Credit Union.

Through the first months of 2019, market participants have seen a more dovish Fed in favor of a “patient” approach to policy along with one which will focus on economic data points like unemployment along with inflation. which’s a switch through a central bank which hiked rates four times last year along with until the March meeting had been indicating two more increases before the end of This particular year.