(Photo: AP)
U.S. central bankers are ready to raise interest rates again so long as the economy stays healthy, according to a record of the Federal Reserve's most recent policy meeting.
"Many participants suggested that if incoming data continued to support their current economic outlook, it would likely soon be appropriate to take another step in removing policy accommodation," minutes of the July 31-Aug. 1 Federal Open Market Committee meeting released Wednesday in Washington said.
The minutes said that "further gradual increases" in their target rate "would be consistent with a sustained expansion of economic activity, strong labor market conditions and inflation near the committee's symmetric 2 percent objective over the medium term." Many officials, the minutes said, "noted that it would likely be appropriate in the not-too-distant future to revise the committee's characterization of the stance of monetary policy" in its statement, the minutes said. Describing policy as "accommodative" would at some point "fairly soon," no longer be appropriate, the minutes said.
U.S. stocks fluctuated and the dollar fell following the report. Led by Jerome Powell, a Trump appointee who took over the chairmanship in February, policy makers are gradually raising rates. They aim to give the economy room to run while also trying to keep inflation expectations anchored.
Jackson Hole
There's little evidence that the seven quarter-point increases since December 2015 are hurting growth. Nevertheless, the rate increases have drawn criticism from President Donald Trump. Powell may update his outlook when he gives a speech Friday on "Monetary Policy in a Changing Economy" at the Kansas City Fed's annual forum in Jackson Hole, Wyoming.
Fed officials left the benchmark lending rate unchanged earlier this month while upgrading their description of economic growth in their statement to "strong," compared to "solid" in June.
Much of their discussion during the meeting involved upside and downside risks.
