Rising interest rates in December became a much stronger possibility yesterday, when the Fed released the minutes from its last meeting. The central bank released a statement explicitly saying it would consider raising rates “at its next meeting” in mid-December. That’s the most direct statement we’ve had yet on the subject, ever since interest rates went to near-zero back in 2008.
The new statement said the Fed would be “monitoring global economic and financial developments.” That seems like a far less cautious statement than it issued in mid-September, when the Fed warned that “recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term.”
Fed officials say they want to be “reasonably confident” that U.S. inflation will rise back to 2% before they begin raising rates. October’s inflation reading was the first positive one in three months – potentially the last step toward the Fed raising rates.