Fed Is Seriously Considering Raising Interest Rates in June, Meeting Minutes Say

The New York Times reports:

The Federal Reserve sent a sharp, simple message to financial markets on Wednesday: Pay attention. The Fed is thinking seriously about raising its benchmark interest rate at its next meeting, in June.

The unusually frank bulletin was delivered in the official account of the Fed’s April meeting, which said explicitly that most officials thought “it likely would be appropriate” to raise rates in June if the economy had rebounded from a weak winter.

That message is sharply at odds with the expectations of investors, who have largely written off the chances of a June increase, betting instead that the Fed would leave rates unchanged until later in the year. Measures calculated from asset prices suggested that investors saw less than a 20 percent chance of a June increase before Wednesday.

There is no certainty that the Fed will move at its meeting on June 14 and 15. The available economic data does not appear to show the strength that the Fed wants to see, and some officials said in April that there might not be time to gain the necessary confidence before the June meeting. But the account made clear that Fed officials want markets to take the possibility much more seriously.

The central planners warn.