Minutes Show Fed Ready To Raise Rates "Soon"

(RTTNews) - The Federal Reserve is on track to raise interest rates this summer, most likely in June, according to the minutes of the central bank's May 2-3 meeting.

"Several" voting members at the Fed eye a faster pace of rate hikes over the medium-term, while a "couple" others say slower pace may be best.

In any event, "most" seem comfortable with another rate hike "soon," the minutes said. The Fed currently projects three rate hikes in 2017, the first of which happened in March, when the FOMC raised rates for only third time in a decade.

With the economy showing intermittent improvement, policy makers also discussed scaling back their $4 trillion-plus holdings of mortgage-backed bonds and longer-term U.S. government bonds.

The Fed decided not to raise rates in May, noting weak inflation and a mild economic lull.

"The information reviewed for the May 2-3 meeting indicated that the labor market strengthened further in March but that growth of real gross domestic product (GDP) slowed in the first quarter, with the slowing likely reflecting transitory factors," the minutes said.

Real GDP growth is therefore projected to bounce back in the second quarter from its weak first-quarter reading.