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July 08, 2015
June FOMC minutes: Conditions 'not yet been met' for a rate hike
Minutes from the Federal Open Market Committee's June meeting show that despite seeing some economic progress, members of the committee felt the conditions warranting an increase in the federal funds rate "had not yet been met."
The minutes note that "additional information on the outlook, particularly for labor markets and inflation, would be necessary before deciding to implement such an increase."
The minutes show only one committee member indicated a willingness to raise rates in June, but this person "also expressed a willingness to wait another meeting or two for additional data."
In a policy statement issued at the conclusion of its June 16-17 meeting, the committee said economic activity had expanded "moderately" after a slow first quarter, and it said the pace of job growth had "picked up" while unemployment stayed level. It also noted moderate growth in household spending, improvement in housing and stable energy prices.
"The minutes from the FOMC's June meeting show that we are approaching the necessary conditions for liftoff," said NAFCU Chief Economist and Director of Research Curt Long. "In particular, the labor market continues to tighten, and, by certain measures, there is evidence of wage growth."
On the other hand, Long said, weakness abroad could potentially cause delays. "If financial markets react strongly to the events in Greece, China or elsewhere, the Fed will have serious reservations about increasing rates," he said.
The federal funds target rate has remained at a range of 0 to 0.25 percent since December 2008.
The minutes note that "additional information on the outlook, particularly for labor markets and inflation, would be necessary before deciding to implement such an increase."
The minutes show only one committee member indicated a willingness to raise rates in June, but this person "also expressed a willingness to wait another meeting or two for additional data."
In a policy statement issued at the conclusion of its June 16-17 meeting, the committee said economic activity had expanded "moderately" after a slow first quarter, and it said the pace of job growth had "picked up" while unemployment stayed level. It also noted moderate growth in household spending, improvement in housing and stable energy prices.
"The minutes from the FOMC's June meeting show that we are approaching the necessary conditions for liftoff," said NAFCU Chief Economist and Director of Research Curt Long. "In particular, the labor market continues to tighten, and, by certain measures, there is evidence of wage growth."
On the other hand, Long said, weakness abroad could potentially cause delays. "If financial markets react strongly to the events in Greece, China or elsewhere, the Fed will have serious reservations about increasing rates," he said.
The federal funds target rate has remained at a range of 0 to 0.25 percent since December 2008.
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