Fed Sounds Cautious Note but Doesn’t Deter Forecast of Rate Increase - By BINYAMIN APPELBAUMMAY 24, 2017 WASHINGTON — Federal Reserve Board officials said at a meeting early this month that they wanted to see evidence of stronger economic growth before continuing to increase the Fed’s benchmark interest rate, according to minutes of the meeting published on Wednesday. Although the Fed left the rate unchanged this month, its statement after the meeting was widely interpreted as setting the stage for a rate increase because of its reference to slow growth in the first quarter as “likely to be transitory.” The account of the May meeting, published by the Fed after a standard three-week delay, generally reflects that optimism, describing most officials as ready to raise rates “soon,” provided the economy shows signs of the expected rebound. The account of the meeting also noted that the government had regularly reported slow winter growth in recent years, and there was some evidence to suggest that the problem was not the economy but the methodology. “Members generally judged that it would be prudent to await additional evidence indicating that the recent slowdown in the pace of economic activity had been transitory before taking another step in removing accommodation,” the account said, referring to the members of the Federal Open Market Committee, which determines monetary policy. Gus Faucher, chief economist at PNC, noted that shortly after the May meeting, the government estimated that the economy had added 211,000 jobs in April and that the unemployment rate had fallen to 4.4 percent.
