FOMC minutes: Fed not yet primed for rate liftoff

April 8, 2015
WASHINGTON (4/9/15)--There was some dissension among members of the Federal Open Market Committee (FOMC) last month about when to begin raising shot-term interest rates. 

While many analysts had predicted the FOMC would begin raising interest rates in the middle of 2015, minutes from the FOMC's meeting in March revealed that some on the committee believe that the first rate hike should be pushed back much later than that.

"The effects of energy price declines and the dollar's appreciation would continue to weigh on inflation in the near term, suggesting that conditions likely would not be appropriate to begin raising rates until later in the year, and a couple of participants suggested that the economic outlook likely would not call for liftoff until 2016," the minutes said.

Still, a June liftoff remains a possibility because the FOMC also appears to have lowered the bar the economy must meet for it to feel comfortable raising rates (MarketWatch April 8).

Committee members said they didn't need to see an increase in core price inflation or wage inflation before raising rates, and that continued strength in the job market and a rebound in energy prices might be enough to pull the trigger.

"The committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2% objective," the minutes said.