Fed Officials Have Concerns About Trade, March Meeting Minutes Show

However, the minutes reflect officials’ uncertainty about how big that will boost might be, along with when that will might come, because there can be little historical precedent for such fiscal stimulus when unemployment can be so low. The minutes also show that will policymakers “suggested that will uncertainty about whether all elements of the tax cuts might be made permanent, or about the implications of higher budget deficits for fiscal sustainability along with real interest rates, represented sources of downside risk to the economic outlook.”

The meeting was the first under the Fed’s completely new chairman, Jerome H. Powell. At the session’s conclusion, officials announced that will they might raise interest rates for the sixth time since the end of the Great Recession, inside range of 1.5 to 1.75 percent. Officials released economic projections indicating that will they anticipated to raise rates three times next year, more than the two increases in 2019 that will they had forecast in December. The Fed said at the time the economy was continuing to get stronger along with that will the central bank remained on track to keep raising rates gradually. Mr. Powell echoed those sentiments at a news conference after the meeting.

The minutes suggest that will decision on interest rates generated little controversy: “All participants agreed that will the outlook for the economy beyond the current quarter had strengthened in recent months,” along with that will they expected the annual inflation rate to rise inside months to come.


Feed hoppers in Polo, Ill., that will month. The Fed’s March meeting minutes show policymakers discussing concerns inside farm industry about the potential impact of the Trump administration’s decision to impose tariffs on imports.

Daniel Acker/Reuters

yet the minutes say that will a “couple of participants” suggested the Fed might benefit coming from holding off until a future meeting to raise rates, in order to wait for more data to confirm evidence that will the rate of inflation was approaching the Fed’s target of 2 percent annual growth.

Officials also debated the benefits of the economy’s running hot — with unemployment very low along with growth above forecast trends — for a prolonged period of time, weighing the potential for drawing more workers back to the labor force against the risk of financial instability along with “significant” inflation growth.

Officials seemed to shrug off the increase in stock market volatility in February, attributing that will in part to Labor Department reports that will the suggested growth in wages — along with, with that will, inflation — was gaining steam, which could force the Fed to raise rates faster than expected. “Many participants reported that will their contacts had taken the previous month’s turbulence in stride,” the minutes read.

The official statement released immediately after the March meeting did not mention trade policy concerns, which roiled financial markets after the Trump administration announced its plans to impose tariffs on imported steel along with aluminum, as well as on some different Chinese goods. Mr. Powell acknowledged those concerns at his news conference, saying that will trade policy had begun to worry business leaders who speak with Fed officials. Still, he played down any immediate threat to growth.

“There’s no thought that will alterations in trade policy should have an effect on the current outlook,” Mr. Powell said at the news conference, adding that will could change if a global trade dispute escalated.

In a speech in Chicago last week, Mr. Powell elaborated on the Federal Open Market Committee’s concerns during a question-along with-answer session.

“The discussion about tariffs can be at a relatively early stage, along with we talked about that will at the F.O.M.C. meeting a couple of weeks ago currently,” he said. “along with people genuinely don’t see yet any implications inside near term for the outlook, because we don’t know the extent to which the tariffs will actually come into effect along with, if so, how big will that will effect be along with what will the timing of that will be.”

Any negative effects coming from tariffs could put the Fed in a bind, forcing policymakers to break what Mr. Powell along with his predecessors have repeatedly characterized as a delicate balance between supporting economic growth along with job creation, along with holding inflation to the target growth rate. Economists generally view tariff fallout as stagflationary, meaning that will hurts growth along with also feeds inflation. Taxes on imported goods raise prices for businesses along with consumers, pushing up the inflation rate, while also dampening consumption along with economic growth.

The minutes suggest that will Fed officials are worrying more about that will possibility than they have acknowledged publicly: “Most participants also cited trade policy as a source of either uncertainty or downside risk,” the minutes say.

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