Fed Meeting Minutes Indicate Central Bank Anticipates More Rate Hikes Under Trump Administration
Minutes from the Federal Reserve’s most recent meeting in mid-December indicate that central bank officials expect President-elect Trump’s election “to result in somewhat faster economic growth over the next several years,” the New York Times reports. The Times says the minutes seem to suggest that “the Fed sees itself as a counterweight to Mr. Trump’s promised policies of tax cuts and infrastructure and defense spending.” USA Today reports that Fed officials said “they might have to raise interest rates faster than anticipated to prevent rapidly falling unemployment from fueling excessive inflation.” Their comments help explain why the central bank, “in addition to raising its benchmark interest rate for the first time in a year as anticipated, ratcheted up its forecast to three rate hikes in 2017.” According to the Wall Street Journal, the minutes highlighted comments made by chairwoman Yellen at a press conference after the December meeting, at which she stressed the “considerable uncertainty” about possible policy changes the Trump Administration and the new Congress will support, their potential economic impacts and what they will mean for monetary policy. Ultimately, the Journal notes that Reserve officials seem to suggest that the mix of tax, spending, and regulatory policy changes that the new Administration and Congress pursues will determine whether economic growth ends up being faster than anticipated at the December meeting.
What This Means For Small Businesses
Small businesses have been looking for signs of life in the US economy. The Federal Reserve’s expectations that President-elect Trump’s policies will accelerate economic growth is welcome news, as it signals 2017 may be a more positive year to operate a small business than 2016 was.
Additional Reading
Reuters also reports on the meeting minutes.
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.
