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Fed minutes suggest June rate hike possible, data flow key

Published 05/18/2016, 07:37 PM
Updated 05/18/2016, 07:39 PM
© Reuters.  Fed minutes suggest June hike

Investing.com - The Federal Reserve minutes of the April board meeting released on Wednesday showed both voting and non-voting participants on the Federal Open Market Committee have a strong bias for raising rates at June 14-15 meeting, if economic data continues to come in as expected.

"Regarding the possibility of adjustments in the stance of policy at the next meeting, members generally judged it appropriate to leave their policy options open and maintain the flexibility to make this decision based on how the incoming data and developments shaped their outlook," the minutes of the April 26-27 meeting said.

Some voting members were determined to keep their options open, "some members expressed concern that the likelihood implied by market pricing that the committee would increase the target range for the federal funds rate at the June meeting might be unduly low," the minutes said.

As well, an assessment of risks posed by global economic and financial conditions was downplayed, and the minutes pointed to additional strengthening of the U.S. labor market despite an apparent slowdown in economic activity.

The committee held steady the policy fed funds rate at 0.25% to 0.50% at its April 26-27 meeting on a 9-1 vote with Kansas City Fed President Esther George dissenting.

While "most participants" agreed June may the time to raise rates "several participants were concerned the incoming information not provide sufficiently clear signals to determine by mid-June" if a rate hike would be appropriate.

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