WASHINGTON — Federal Reserve officials thought last month that the economic conditions that are needed to trigger the first interest rate hike in nearly a decade could “well be met” by their next meeting in December.
Minutes of the October discussions released Wednesday revealed Fed officials’ view that the job market would improve further and that inflation would begin to move toward their 2 percent annual target. They took note of the U.S. economy’s resilience through a summer of financial market turbulence and felt that global threats had “diminished.”
The Fed has kept its benchmark for short-term rates near zero since late 2008.
In the end, the Fed at its Oct. 27-28 meeting left its key rate unchanged but said further progress could justify a December hike. Officials in the minutes stressed that no decision had yet been made.
When rate increases do begin, they will occur at a gradual pace, officials reiterated in the minutes. Most economists are forecasting a small quarter-point rate hike in December.
The wording in the October statement marked the first time in seven years of ultra-low rates that the Fed had suggested that it might raise rates at its next meeting. Fed officials were encouraged by the “solid pace” of consumer spending in the third quarter and generally expected further moderate gains in coming months, according to the minutes.
The October meeting came after a disappointing September jobs report, which was noted in the minutes. But since then, the job market surged in October, with employers adding 271,000 jobs, the most this year.
