Federal Reserve officials are planning more interest rate hikes in the months ahead, despite attacks from President Trump, notes from the central bank's most recent monetary policy meeting reveal.
According to the minutes released Wednesday, some members of the monetary policy committee judged economic output to be strong enough to raise concerns about the economy overheating, necessitating more increases in their target interest rate.
The Fed set interest rates at historical low levels in the wake of the recession to spur spending and economic growth, but as unemployment falls, Fed officials are increasingly wary that inflation could rise.
Still, officials said they wanted to monitor domestic and foreign market data closely before committing to a course of action, since a number of factors, including struggles in emerging markets, trade wars, and last year's tax overhaul, could dramatically affect the economic outlook in months to come.
Officials participating in the meeting "commented on a number of risks and uncertainties associated with their outlook for economic activity, the labor market, and inflation over the medium term," the minutes read. Trade policy, mainly the increase or threat to increase tariffs, "remained a source of uncertainty for the outlook for domestic growth and inflation."
The possibility of higher inflation led the central bank to vote unanimously last month to raise the main rate at which it lends to banks. The Fed raised interest rates three times this year and appears to be on track to implement more in the months ahead.
Trump touts the economy’s success as a core achievement of his administration, but bashed the Fed in recent weeks for raising interest rates on the grounds that doing so could slow down economic growth. Trump called the Fed “his biggest threat” in a Tuesday interview with Fox Business Channel.
Because the minutes released today come from a meeting held last month, it’s difficult to say whether Trump’s comments have registered at all with the central bank. Federal Reserve Chairman Jerome Powell, a Trump appointee, has repeatedly asserted that the Fed needs to remain independent of political influence, as the central bank’s designed to be in order to preserve economic stability.
Fed officials have also called for vigilance about the risk that Trump’s trade wars with China and European countries could hurt the economy.