Members of the Federal Open Market Committee expect faster economic growth in the second half of 2014 and in 2015 under current monetary policy, according to minutes from the September meeting that were released Wednesday.
At that meeting, FOMC members agreed to keep their “highly accommodative” federal funds rate in the zero to 0.25% target range “for a considerable time.”
“Participants then saw real growth moving back slowly toward its longer-run rate in 2016 and 2017,” the minutes said, with estimates of that longer-run normal level rate ranging from 3.25% to 4.25%. “All but a few” members thought it appropriate to begin raising the federal funds rate “fairly gradually,” and to set the rate at or near its longer-run normal level in 2017.
Even then, some members thought “it would still need to be set appreciably lower” for several reasons, including continuing economic headwinds, the “asymmetric” effect of lower rates in effect now and a desire to minimize disruption to financial markets.
All FOMC members agreed it was appropriate to conclude their bond-buying program in October, according to the minutes.
