Fed eyes more aggressive interest rate path

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Some members of the Federal Reserve are urging the bank to consider raising interest rates more quickly, which could mark a turn from its gradual approach in the last few years.

They expect that the higher economic growth and inflation in order to justify more aggressive action in the medium term.

Their points of view were expressed in the minutes of the bank of the March meeting, published Wednesday.

Stock markets, which see rates close to, submerged in the release.

The Fed uses interest rates as its main tool to keep the U.S. economy on a path of sustained economic growth and controlled inflation.

It lowered rates significantly during the financial crisis to stimulate economic activity, but the Fed has been raising rates slowly in the last few years as the economy strengthened.Slightly more pronounced?

“Almost all” participants agreed that a gradual approach to increasing interest rates remained appropriate in the medium term, according to the minutes.

However, “a number of participants” said that they expect more growth and inflation in the next few years, which suggests the path for interest rates “would probably be slightly more pronounced than they had anticipated”, according to the act.

The members also discussed the need to state “at some point” that their policy is likely to move from trying to stimulate economic activity, to be neutral – or even a “restriction factor”.

The discussions that come after a rebound in growth last year, which pushed the unemployment rate down to 4.1% – the lowest level since the year 2000.

Economists predict that the recently approved tax cuts and public spending will drive future growth, and possibly inflation. However, the commercial disputes, the most prominent of the tariffs on goods in the united states and China, are a concern.

An increase in the Fed’s benchmark federal funds rate usually leads to higher rates for consumers and businesses.

Savers benefit, but the loans it becomes more expensive, which may hinder the activity in the industries such as housing and auto sales and increased costs for companies that rely on debt.