Fed minutes could reveal if rate hikes are done or just paused

By The FedFOXBusiness

Federal Reserve vice chairman: US economy has momentum, Fed can be ‘patient’ in 2019

FBN’s Edward Lawrence and MarketWatch markets editor Mark DeCambre discuss Federal Reserve Vice Chairman Richard Clarida's comments about the health of the U.S. economy.

Investors may get a better read on the Federal Reserve’s stance on interest rates on Wednesday when the minutes of the last meeting are released.

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Stocks have been mostly rising since the last meeting on optimism that the policymakers could be done with raising rates.

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Some even believe the Fed’s next move could be to cut the benchmark short-term rate, something it hasn’t done since December 2008, when the global financial crisis forced the central bank to slash rates to zero, according to the Wall Street Journal.

Loretta Mester, president of the Federal Reserve Bank of Cleveland, said Tuesday that interest rates should rise slightly this year assuming the economy grows at the pace that she expects.

Much of the disagreement over the Fed’s next rate move stems from its decision in January to remove explicit reference to future rate increases from its monetary-policy statement. Before the January meeting, the central bank had included that language in all of its statements since 2015.

Federal-funds futures—used by traders to place bets on the course of monetary policy—show the market pricing in a 0.9% chance of the Fed raising rates at least once by year-end, down from about 30% a month ago, according to CME Group.

One reason some analysts remain skeptical the Fed is done with rate increases: The economy, they say, looks far stronger than it did the last time the Fed decided to lower interest rates.

There are parts of the economy starting to show signs of weakness. Among them are a slowdown in the housing sector as well as falling consumer confidence.

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Also the retail sales report for December came in very weak.

The global economy has also taken a hit from the trade war going on between the U.S. and China and the threat of higher tariffs.