Federal Reserve officials largely approved a patient approach to monetary policy in 2019 during their two-day March meeting, but suggested that if the economy improves, more interest rate hikes could be on the horizon.
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At the same meeting, policymakers at the U.S. central bank unanimously voted to keep the benchmark federal funds rate steady in a target range of 2.25 percent to 2.5 percent. The Fed also signaled there will be no additional hikes for the remainder of 2019 because of concerns about slowing global growth.
Although a majority of policymakers anticipated they would leave the target range unchanged in 2019, many stressed that their decisions about the appropriate range for interest rates depended on the economic outlook, as well as potential risks to that outlook, according to minutes of the March meeting released on Wednesday.
“With regard to the outlook for monetary policy beyond this meeting, a majority of participants expected that the evolution of the economic outlook and risks to the outlook would likely warrant leaving the target range unchanged for the remainder of the year,” the minutes said.
At the same time, committee members suggested that if the economic outlook improves this year -- which a majority said they expected -- additional interest rate hikes may be warranted.
"Some participants indicated that if the economy evolved as they currently expected, with economic growth above its longer-run trend rate, they would likely judge it appropriate to raise the target range for the federal funds rate modestly later this year," the minutes said.
While they expected GDP to slow markedly in the first quarter of 2019 because of softening consumer spending and business investment, Fed members said they anticipate a bounce back of growth in the second quarter.
Since officials last met, President Trump has urged the central bank -- which he blames for slowing down economic growth -- to "drop rates and get rid of quantitative tightening." Trump has been a harsh critic of the interest rate policy set forward by the Fed and has attempted to influence the monetary policy.
In addition to that, the president has said that he will appoint Herman Cain, the former Republican presidential candidate, and Stephen Moore, a conservative economic analyst and frequent Fed critic, to the central bank's seven-member board. If nominated and approved, Moore and Cain would fill the two remaining vacancies on the board.