Federal Reserve policymakers agreed at their meeting last month that their next move on interest rates would probably be an increase, after a series of easing moves, minutes released this evening show.
The minutes from the Federal Open Market Committee's June 24-25 meeting suggested that the panel would likely go no lower than the current federal funds rate of 2%.
'With increased upside risks to inflation and inflation expectations, members believed that the next change in the stance of policy could well be an increase in the funds rate,' the minutes said.
'Indeed, one member thought that policy should be firmed at this meeting. However, in the view of most members, the outlook for both economic activity and price pressures remained very uncertain, and thus the timing and magnitude of future policy actions was quite unclear,' they added.
The panel at the meeting made no change in the funds rate, ending a string of rate cuts totaling more than three percentage points since last September. Dallas Fed president Richard Fisher had dissented in the meeting, calling for an increase in rates.
'Economic activity would probably continue to expand slowly over the next several quarters, restrained by a range of factors, including strains in financial markets and institutions and the resulting tightness of credit conditions; ongoing weakness in the housing sector; and the increases in energy and agricultural commodity prices,' the minutes concluded.
