Fed minutes raise expectations for December 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 who widely expect the Fed will boost its benchmark rate by a quarter-point at its Dec. 13-14 meeting said there was nothing in the minutes to change their forecast.
“The Fed meeting minutes say that the case for a rate hike keeps on getting stronger and stronger,” said Chris Rupkey, chief financial economist at MUFG Union Bank in New York. “A rate hike is coming in December.”