WASHINGTON—The Federal Open Market Committee (FOMC) indicated that the timing of future rate increases remains uncertain, in line with recent comments made by Fed Chairman Jerome Powell.
However, the committee still seems poised for a quarter-point rate hike in December, according to minutes released from the FOMC's November meeting.
"Chairman Powell's comments notwithstanding, a rate hike in December is still likely," noted NAFCU Chief Economist and Vice President of Research Curt Long. "In September, the committee's median forecast called for three rate hikes in 2019. It will be interesting to see if that is dialed back to two when the forecasts are updated next month."
In November, the committee held rates steady at a range of 2% to 2.25%.
Also Worth Noting
Also of note from the minutes, according to Long:
- Committee members agreed that the labor market has continued to strengthen, and that economic activity is on an upward path
- Several factors support "above-trend" economic growth, including the current levels of employment gains, federal tax and spending policies, and high levels of consumer and business confidence
- Several committee members noted that the "stimulative effects of fiscal policy would likely diminish over time, while the lagged effects of reductions in monetary policy accommodation would show through more fully." Both these factors lead them to expect that economic growth "would slow to a pace closer to trend"
- As far as risk and uncertainties moving forward, a few committee members pointed to uncertainty over the effects of fiscal and trade policies; others expressed concerns over high levels of debt in the nonfinancial business sector. Tariffs and trade tensions were also cited as future risk factors
The FOMC meets again Dec. 18-19.