The Fed’s minutes, posted on the bank’s website, said that policymakers made a decision to leave the rates alone even though there were influential indicators – such as rising inflation – that the USA economy could withstand a hike.
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Lockhart noted that the Fed will have much more economic data available in December to help make a decision.
“Based on my forecast, yes I am” expecting to raise rates this year, said Dudley, a close ally of Yellen who has a permanent vote on policy. Investors stayed cautious over possible intervention by the central bank to prop up the second-worst performing Asian currency further.
Fed officials since then, including Mr. Lockhart, have largely agreed that a rate rise this year still remains likely, but many observers are uncertain how officials will be able to gain the confidence they need to boost rates off current near-zero levels before the year ends.
Evans suggested that he would prefer a longer and slower move to raise interest rates, saying that the Fed’s target interest rate could still be under 1 percent by the end of 2016.
Lockhart said that trying to interpret the recent twists and turns in the economy has been like riding a roller-coaster.
Many economists believe the weak jobs report has eliminated the possibility of a rate hike at the next meeting in October. Though Dudley said a rate hike could theoretically occur at any meeting, his comments seemed to favor December.
When the Fed does start raising rates, something it hasn’t done in nine years, it will eventually mean higher rates for consumers and businesses.
On Friday, U.S. benchmark West Texas Intermediate was up 1.8 percent and Brent was 1.4 percent higher, with continuing strife across the oil-rich Middle East providing support.
Minutes of the September FOMC meeting, released Thursday, showed that Fed officials were concerned about the impact of weakening global growth on inflation, which has remained below the Fed’s growth target of 2 percent for the past three years.
Spot gold was up 1.6 percent at $1,156.70 an ounce at 2:44 p.m. EDT (1844 GMT), after touching a peak of $1,159.80, its highest since August 24.
The USA dollar hit multi-week lows against the euro and Swiss franc while stocks on major world markets were on track for their biggest weekly gain since 2011. “An average bond maturity of 20-plus years will see about a 13 percent drop in price if rates increase from 3 percent to 4 percent”, says Greg Ghodsi, managing director of investments at 360 Wealth Management Group of Raymond James in Tampa, Florida. He said that interest rate changes by the Fed, alone, wouldn’t accelerate growth.
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“Although United States economic data releases generally met market expectations, domestic financial conditions tightened modestly as concerns about prospects for global economic growth, centred on China, prompted an increase in financial market volatility and a deterioration in risk sentiment during the intermeeting period”, the minutes said.
