Fed Minutes Offers Insight on Central Bankers’ Outlook for 2017

According to a Wall Street Journal article, Federal Reserve officials acknowledged the possibility that they might have to raise interest rates faster than the "gradual" pace in 2017.

In the minutes of the Federal Reserve Board's (FRB) December meeting, it was revealed that nearly all policymakers involved agreed that, in anticipation of fiscal stimulus, there may be a need to accelerate the pace of rates hikes.

The minutes, released Wednesday, demonstrated the impact of President-Elect Trump’s promises to cut taxes, increase infrastructure spending, and deregulate industries on sentiment even within the FRB. "About half of the participants incorporated an assumption of more expansionary fiscal policy in their forecasts and almost all also indicated that the upside risks to their forecasts for economic growth had increased," as quoted from the minutes.

In addition to the minutes, FRB also released its economic projections last month pointing to a labor market heating up, over its long-rum equilibrium. However, it should be noted that they also "emphasized the considerable uncertainty" surrounding any economic policy changes.

Trump will take office on January 20, 2017 and has yet to outline in detail his economic policy plans.

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