WASHINGTON (AP) – Federal Reserve officials believed last month that near-term risks to the U.S. economy had subsided and that an interest rate increase could soon be warranted. But they did not indicate when they would likely raise rates.
The minutes of their July 26-27 meeting show that officials were encouraged by a rebound in job growth. They also took note of a stabilization of financial markets after a bout of turbulence triggered by Britain’s June 23 vote to leave the European Union.
The Fed officials believed those developments had lessened the risks for the economy in the short run. The minutes show that as a result, the officials thought a rate increase “was or would soon be warranted.”
But a key factor holding the Fed officials back was the stubbornly slow rate of inflation, which has been running below the central bank’s 2 percent target for more than four years, according to the minutes.
The minutes released Wednesday closely parallel the message the Fed sent in a statement it released after its July meeting.