Federal Reserve policymakers were divided at their April meeting over whether the economy’s winter weakness was temporary or might last longer. But they generally agreed that June would be too early to start raising interest rates.
While “a few” Fed officials believed that the U.S. economy would be ready to raise rates in June, they were outnumbered by “many” Fed officials who viewed it as “unlikely” that the economic data would be strong enough to justify a hike next month.
CIBC economist Andrew Grantham says that such economic data should confirm an uptick by September. That’s the month the bank’s economists are predicting the Fed will begin to raise interest rates.
In a note to analysts, Grantham says that Fed members’ conflicting views about when they would have enough strong economic data to raise rates means that market reaction to these minutes should be limited.
The opposing views were revealed in the minutes of the Fed’s discussions at their April 28-29 meeting. The Fed has kept its key rate near zero since December 2008.