'Several' On Fed Favored June Rate Increase: Minutes

MarketWatch Pulse

Several Federal Reserve officials thought that the U.S. central bank would be able to raise interest rates for the first time in June, according to minutes from the March meeting released Wednesday. At the same time, others thought a rate hike would not be warranted until later in the year as low oil prices and the strong dollar would likely hold inflation down. The minutes of the March 17-18 meeting might not reflect the current thinking of U.S. central bank officials in light of the weak March job data released two weeks later. During their discussions, Fed officials set a low bar for lift-off, saying they didn't need to see an increase in core price inflation or wage inflation before hiking rates. Further improvement in the labor markets, stabilization of energy prices or a leveling out of the value of the dollar might be enough to move, officials said. In their discussions of the exit strategy, Fed officials for the first time floated the idea of selling very short-term Treasury securities from their massive balance sheet as a potential tool although some officials were cool to the idea because it might cause "an outsized market reaction."

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