FRB Minutes Signal Optimism in Economy

The Federal Reserve Board's (FRB) minutes from its January 31st – February 1st meeting showed that many policymakers favored raising interest rates "fairly soon", so long as the economy and inflation stay the course, according to a WSJ article.

While the FRB has penciled in three rate increases for 2017, in the minutes it was cautioned that "the committee might need to raise the federal-funds rate more quickly than most participants currently anticipated to limit the buildup of inflationary pressures."

The FRB warned market watchers against using its previous communications as a guide, as they "might be understood as commitment to only one or two rate hikes per year." The FRB's willingness to hike rates stems largely from a firming economy and a measure of inflation which rose to 2.5 percent in January, the largest such annual move since March 2012.

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