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Rate Hike Coming Soon? 5 Key Takeaways from the Latest Fed Minutes

Madeleine Johnson

On Wednesday, the Federal Reserve released documents from the January 31-February 1 session that showed officials of the Federal Open Market Committee (FOMC), the central bank’s policy-making division, discussing the possibility of a rate hike “fairly soon,” as well as dealing with the uncertainty brought upon by the Trump administration.

Here are 5 key takeaways from the minutes:

1. This was the first meeting since Trump took office, and while the president was never mentioned, talk of his policies were scattered throughout. With rumblings of higher levels of confidence in the business world, economic growth related to President Trump’s policies could lead to a rate hike.

2. “Many participants expressed the view that it might be appropriate to raise the federal funds rate again fairly soon if incoming information on the labor market and inflation was in line with or stronger than their current expectations or if the risks of overshooting the committee’s maximum-employment and inflation objectives increased,” the minutes said.

3. Job gains have remained solid, and the unemployment rate stayed near its recent low. Household spending rose at moderate levels, while business-fixed investments remained “soft.”

4. Central bank officials seemed to ready for a more aggressive rate hike pace. "Participants emphasized that the Committee might need to change its communications regarding the anticipated path for the policy rate if economic conditions evolved differently than the Committee expected or if the economic outlook changed," the summary said. "They pointed to a number of risks that, if realized, might call for a different policy trajectory than they currently thought most likely to be appropriate."

5. The Committee decided to maintain the target range for the federal funds rate at 0.50% to 0.75%. The FOMC next meets on March 14-15.

Check out the full minutes release here.

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