Fed minutes show extended debate on rate guidance

Associated Press

WASHINGTON (AP) — The Federal Reserve struggled last month over how to convey to investors how fast it will raise short-term interest rates once it increases them from record lows.

The Fed held a previously unannounced March 4 videoconference to debate the issue in advance of its regular March 18-19 meeting, according to minutes of the meeting released Wednesday.

In the end, the Fed decided on an open-ended approach: That even after employment and inflation are nearly back to normal levels, short-term rates may need to stay unusually low for a while because the economy isn't fully healthy.

Investors have been intensely following the Fed's guidance on interest rates. A short-term rate increase would elevate borrowing costs and could hurt stock prices.

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