Most members of the Federal Open Market Committee thought that the conditions for raising the federal funds rate “could well be met by the time of the next meeting” in December, according to minutes of the Oct. 27-28 meeting released Wednesday.
Meeting participants said the data they reviewed between the September and October meetings suggested that economic activity had been expanding moderately, according to the minutes, which makes the Dec. 15-16 meeting a likely time for a rate hike.
If a rate increase happens, “I think it's going to result in what we've been thinking all along, which means a flatter yield curve,” said Michael Collins, managing director, senior investment officer and senior portfolio manager for multisector fixed-income strategies at Prudential Fixed Income, in an interview. “It should also be bullish for credit spreads and for rates. This is really a positive thing for fixed-income assets and total returns in fixed income,” Mr. Collins said.
