Fed Minutes Put December Rate Hike In Doubt

(RTTNews) - A number of Federal Reserve officials want more confidence about higher inflation before supporting another rate-hike, the minutes of the central bank's September meeting show.

While some say waiting for inflation to hit the central bank's 2% target before further interest rate hikes would be a mistake, others are urging "patience," putting a December rate hike in doubt.

The Fed has raised interest rates twice in 2017, but their most recent projections called for a third by year's end.

However, inflation is not cooperating as of yet.

Markets will paying close attention on Friday for U.S. inflation numbers from September. The cost of living probably rose last month, but that may have been the result of temporary factors associated with Hurricane Harvey such as higher gas prices.

From what the September minutes suggest, a growing number of Fed officials will probably want further confirmation in October and November before deciding that healthier levels of inflation can be sustained.

In September, the Fed kept rates unchanged as expected for a second consecutive meeting but they finally began their balance sheet normalization process, as policy makers elected to trim holdings of government and mortgage debt acquired after the economy collapsed a decade ago.

Last week, the first $10 billion of bonds expired off its balance sheet.