US Fed minutes point to rate hike coming ‘relatively soon’


The US Federal Reserve will raise rates “relatively soon”, according to minutes from its September meeting where officials were split on their decision to keep rates on hold.

While the FOMC decided to keep rates on hold at the September meeting, a majority of the committee anticipate at least one rate hike before the end of the year.

Released on Wednesday, the notes stated: “Several members judged that it would be appropriate to increase the target range for the federal funds rate relatively soon if economic developments unfolded about as the Committee expected.”

The minutes noted a reasonable argument could be made either for a hike at the September meeting or for waiting for further data on the labour market and inflation.

US markets had a mixed, but muted reaction with the Dow Jones and S&P ending the day slightly up, while the Nasdaq was down.

Head of equity strategy at stockbroker Interactive Investor Lee Wild says: “Most had already pencilled in a December hike, so September?s “close call” is not a needle mover.’

In the lead up to the September decision, market reeled as several officials made hawkish comments.

The S&P 500 suffered its biggest daily drop since the Brexit vote, falling 2.45 per cent and wiping out two months of gains.

The next meeting takes place the week before US voters go to the polls for the presidential election, which may prompt the committee to hold any rate hike to their next meeting in December.