FXStreet (Córdoba) – Federal Reserve officials expressed significant concerns about lingering low inflation according to the minutes of its Dec. 15-16 policy meeting.
Even though FOMC members unanimously decided to raise rates at December’s meeting, some called the decision to raise rates a “close call”. Some members still wanted to see confirmation that inflation was actually rising as they looked forward to additional rate hikes in 2016.
“Because of their significant concern about still-low readings on actual inflation and the uncertainty and risks present in the inflation outlook, they agreed to indicate that the Committee would carefully monitor actual and expected progress toward its inflation goal,” read the minutes released Wednesday.
“Although almost all still expected downward pressure on inflation from energy and commodity prices would be transitory, many viewed the persistent weakness in those prices as adding uncertainty or imposing important downside risks to the inflation outlook,” the minutes said.
Regarding the path of future rate increases, Fed officials expect moves to be gradual . “Based on their current forecasts for economic activity, the labor market, and inflation, as well as their expectation that the neutral short-term real interest rate will rise slowly over the next few years, members expected economic conditions would evolve in a manner that would warrant only gradual increases in the federal funds rate”.
(Market News Provided by FXstreet)