Members of the Federal Open Market Committee discussed the trade-offs in raising the federal funds rate or delaying action longer at their meeting in January, according to minutes released Wednesday.
At the Jan. 28 meeting, FOMC members said in a statement that they “can be patient” before raising the rate from the current target range of zero to 0.25%.
“In their discussion of these issues, participants generally agreed that it was very important for the commencement of policy firming to proceed successfully. Consequently, most were prepared to take the steps necessary to ensure that the federal funds rate traded within the target range established by the Federal Open Market Committee. However, a few participants noted that day-to-day volatility in the federal funds rate, potentially including temporary movements outside the target range, would not be surprising, and that historical experience suggested that such temporary movements had few, if any, implications for overall financial conditions or the aggregate economy,” the minutes said.
“Participants expected that, over the medium term, real economic activity would increase at a moderate pace sufficient to lead to further improvements in labor market conditions toward levels consistent with the committee’s objective of maximum employment.”