FOMC minutes reveal a noncommittal stance on the possibility of a 50-basis point rate hike

by NAFCU Newsroom

The Federal Open Market Committee (FOMC) Wednesday released minutes from its January meeting which revealed most participants believe it would be appropriate for the committee to remove policy accommodation at a faster pace than they currently anticipate if inflation does not move down.

In addition, during the meeting, some participants commented on the risk that financial conditions might tighten unduly in response to a rapid removal of policy accommodation.

“The FOMC was noncommittal on the possibility of a 50-basis point rate increase in March,” said NAFCU Chief Economist and Vice President of Research Curt Long. “For the moment, markets are split down the middle on that possibility. But the latest inflation and retail sales reports have bested expectations, and a strong jobs report in two weeks would provide ample support for a larger hike.”

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