Federal Reserve policymakers opened up the option of lifting short-term interest rates at their next meeting in June, even as many cautioned that a number of economic hurdles lie in the way of another rise. as they gauge when they are confident enough to pull the trigger.
Minutes from the central bank’s April rate-setting meeting showed that most policymakers believed a rise would be “appropriate” at the June meeting if the economic data and job market conditions continue to strengthen as inflation heads towards the 2 per cent target.
However several participants also said they were concerned that the economic signals may not be clear enough by the time of the June 14-15 meeting.
Among the overseas risks which could weigh against a rate rise was the UK referendum on its membership of the European Union, which could cause market jitters as the Federal Open Market Committee gathers next month.
US stocks gave up their gains and the dollar strengthened after the minutes of the Federal Reserve’s April monetary policy setting meeting showed officials opened up the options of lifting short-term interest rates as early as next month.
Fed policymakers have been weighing the merits of a second increase in short-term interest rates following their quarter-point rise in December of last year. With Janet Yellen, the Fed chair, stressing her desire for a cautious approach to policymaking, many investors have been dubious that the central bank will follow through with another move as soon as June.