MNI BRIEF: Fed Boards Say Rate Hikes Warranted Soon - Minutes

A number of directors at the Federal Reserve’s 12 regional banks said in early December it might soon become appropriate to begin a process of removing policy accommodation, minutes from the discussion of the discount rate showed on Tuesday.

While all directors unanimously wanted to keep unchanged at 0.25% the rate commercial banks are charged for emergency loans ahead of the U.S. central bank’s last policy meeting, some directors pointed to ongoing inflation pressures and the rapid improvement in the labor market that might warrant soon the future removal of accommodation. The recommendations from the directors, who don’t set policy but do advise the presidents of the regional Fed banks, were in keeping with the Fed’s decision last month to keep its benchmark overnight lending rate in a target range of between 0.00% and 0.25%.

Members of the rate-setting FOMC this week have indicated they see three quarter-rate hikes to the fed funds rate, likely starting in March, barring a material change in the U.S. economic outlook.