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Federal Reserve Month C At the meeting, almost all participants believed that the conditions for raising interest rates were ripe, and the Fed's decision to raise interest rates by 1 basis point was unanimously adopted. However, the minutes of the meeting showed that some members pointed out that it was possible to raise interest rates every month or not, and that raising interest rates was not necessary.
While agreeing to raise interest rates this month, some members also expressed concerns about low inflation. A renewed strength in the U.S. dollar or a further decline in oil prices will curb rising inflation. Although almost all members believe that the impact of the dollar and oil prices on inflation is temporary, it does increase uncertainty about the future and may also affect the inflation outlook.
The minutes of the monthly meeting showed that as actual inflation levels remain low and inflation expectations are subject to risks and uncertainties, members believe that the Fed should carefully monitor whether both actual inflation and inflation expectations are moving towards the target level. U.S. inflation has been below the Federal Reserve's % target level for more than three consecutive years, and U.S. core inflation last month only increased .% year-on-year. Inflation expectations are also quite subdued, with inflation expectations showing signs of declining in recent months.
As the unemployment rate continues to fall and slack in the economy decreases, inflation should gradually rise. Therefore, almost all officials believe that conditions are ripe for raising interest rates and that U.S. inflation will rise in the coming months. Earlier last year, the Fed said it would raise interest rates when it had reasonable confidence in inflation.
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