WASHINGTON—Federal Reserve officials believed last month that the economic conditions needed to trigger the first interest rate hike in nearly a decade could “well be met” by their next meeting in December.
Minutes of the October discussions released Wednesday revealed Fed officials’ view that the job market would improve further and that inflation would begin to move toward their 2 percent annual target.
They took note of the U.S. economy’s resilience through a summer of financial market turbulence and felt that global threats had “diminished.”
The Fed has kept its benchmark for short-term rates near zero since late 2008.
In the end, the Fed at its Oct. 27-28 meeting left its key rate unchanged but said further progress could justify a December hike. Officials in the minutes stressed that no decision had yet been made.
In recent weeks, a number of Fed speakers have said that a rate hike in December was on the table.
In congressional testimony on Nov. 4, Yellen called a December rate hike a “live possibility” if the economy stays on track. William Dudley, president of the Fed’s New York regional bank, seconded that view in a separate appearance that same day.
In a speech last week, Loretta Mester, president of the Fed’s regional bank in Cleveland, said that she believed the time to hike rates was “quickly approaching” and argued that waiting too long to begin raising rates could allow inflation to take hold.
Jeffrey Lacker, president of the Fed’s Richmond bank, said in a CNBC interview on Wednesday that he believed that any economic impact from the terror attacks last week in Paris would be temporary. He said he had not changed his view that the central bank needs to start raising rates.
Lacker cast the lone dissenting vote at the October and September meetings, arguing in favor of rate hikes at both of those meetings.
