March Policy Meeting Notes Show Officials Inclined Not To Hike Rates In April
According to the meeting minutes from the March meeting of the Federal Reserve’s Federal Open Market Committee, the Federal Reserve appears disinclined to boost interest rates at its next meeting in April. The New York Times reports that the meeting minutes indicate that “several officials were already leaning against an April rate increase at the time of the March meeting because such a move ‘would signal a sense of urgency they did not think appropriate.’” Moreover, “the meeting account emphasized that the Fed retained a relatively optimistic outlook for the domestic economy.” USA Today characterizes the “cautious view” of the Fed as a surprise to economists because of improvements in financial indicators and stocks. However, Bloomberg News indicates that “the March meeting marked an evolution in the Fed’s policy approach as US central bankers gave more weight to the impact of slowing growth abroad on their outlook.” As the Washington Post points out, in a speech last week, Federal Reserve Chair Janet Yellen “reiterated the need for caution, citing the central bank’s limited ability to respond to an unexpected weakening of the recovery.” The newly-released minutes from the March meeting indicate “many participants” held a similar cautious view. However, US News & World Report argues that the March meeting minutes were “peppered with apparent contradictions among some of the Fed’s highest-ranking officials,” and that public remarks from members over the last month “have delivered dramatically divergent takes on the potential evolution of US monetary policy.” Ultimately, notes the AP, “the Fed ended up voting 9-1 to leave its key rate unchanged.”
What This Means For Small Businesses
As small businesses look for signals that the economy might be stabilizing, they have been frustrated by a lack of action on the part of the Federal Reserve. CNBC recently quoted NFIB Chief Economist Bill Dunkelberg as saying, “The major impact of Fed policy, or lack thereof, is basically producing immense uncertainty and no confidence. So people won’t put their money on the table, they won’t expand, they won’t hire.”
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.