Brighter US growth outlook emboldens Fed on rate-hike course

(Feb 22): U.S. central bankers sent a strong message Wednesday that an expansion with “substantial underlying economic momentum” could sustain additional increases in interest rates this year.

Federal Reserve officials “anticipated that the rate of economic growth in 2018 would exceed their estimates of its sustainable longer-run pace and that labor market conditions would strengthen further,” the minutes of their Jan. 30-31 meeting released in Washington on Wednesday showed. A number of participants “indicated that they had marked up their forecasts for economic growth in the near term relative to those made for the December meeting.”

Their collective position on inflation, meanwhile, remained one of cautious optimism that it will move toward their 2% target in the medium term.

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