Half-Point Rate Hike Urged at Feb. 2 Fed Session
Some Federal Reserve officials, increasingly concerned that strong economic growth risked an acceleration of inflation, urged that the Fed raise short-term interest rates by half a percentage point at a policymaking session on Feb. 2, according to minutes of the meeting released yesterday.</br></br>But a majority of the members of the Federal Open Market Committee, the central bank's top policymaking group, preferred raising the target for overnight interest rates by only a quarter- point, the view that prevailed.</br></br>Last week, at the subsequent FOMC meeting, the target was lifted again by a quarter-point. Some analysts said that because economic growth hasn't slowed, some Fed officials probably were pushing again for a larger move.</br></br>Many of the analysts and investors expect at least one and possible two further increases at the FOMC meetings in mid-May and late June.</br></br>At the February session, a majority of the committee cited significant uncertainties about the future course of the economy, including any impact of three earlier rate boosts on the pace of economic growth and "unsettled conditions in financial markets," as reasons for moving slowly.