19 Aug 2015
Fed Minutes: Conditions to raise rates not achieved, but approaching that point
FXStreet (Córdoba) - Minutes of the Fed's July policy meeting showed the bank is moving closer to raise rates but there was no clear sign of an imminent September hike as officials still have wide-range views.
"Most [officials] judged that the conditions for policy firming had not yet been achieved, but they noted that conditions were approaching that point," said minutes of the Fed's July 28-29 meeting, which were leaked earlier than scheduled.
"Some participants expressed the view that the incoming information had not yet provided grounds for reasonable confidence that inflation would move back to 2 percent over the medium term and that the inflation outlook thus might not soon meet one of the conditions established by the Committee for initiating a firming of policy", the minutes said.
Several officials stated that China is currently a concern for the Fed. According to Minutes, it was noted that considerable uncertainty remained about when wages might begin to accelerate and whether that development might translate into increased price inflation.
Minutes reiterated that the timing will be data dependent and the adjustments will be gradual after the first increase “to help ensure that the economy would be able to absorb higher interest rates and that inflation was moving toward the Committee's objective”.
"Most [officials] judged that the conditions for policy firming had not yet been achieved, but they noted that conditions were approaching that point," said minutes of the Fed's July 28-29 meeting, which were leaked earlier than scheduled.
"Some participants expressed the view that the incoming information had not yet provided grounds for reasonable confidence that inflation would move back to 2 percent over the medium term and that the inflation outlook thus might not soon meet one of the conditions established by the Committee for initiating a firming of policy", the minutes said.
Several officials stated that China is currently a concern for the Fed. According to Minutes, it was noted that considerable uncertainty remained about when wages might begin to accelerate and whether that development might translate into increased price inflation.
Minutes reiterated that the timing will be data dependent and the adjustments will be gradual after the first increase “to help ensure that the economy would be able to absorb higher interest rates and that inflation was moving toward the Committee's objective”.