November Fed minutes show officials moving closer to hike
WASHINGTON — Federal Reserve officials earlier this month believed it would be appropriate to raise a key interest rate “relatively soon,” with some arguing for a hike at the Fed’s next meeting in December in order to preserve the Fed’s credibility.
Minutes of the Nov. 1-2 meeting released Wednesday show that Fed officials were moving closer to hiking rates for the first time in nearly a year. Some officials argued that if the Fed did not raise rates at its December meeting, it ran the risk of harming the central bank’s credibility given the many signals it had sent about an impending hike.
Private economists are forecasting that the Fed will boost its benchmark rate by a quarter-point at its Dec. 13-14 meeting.
At the November meeting, the central bank left its benchmark rate unchanged in a range of 0.25 per cent to 0.5 per cent, where it has been all year. There had been little expectation of a rate hike then. Economists believed that the Fed would not want to risk destabilizing financial markets with a rate hike just before voters went to the polls.