US Federal Reserve mulls interest rate increase

US Federal Reserve mulls interest rate increase

Wednesday, May 21, 2014 7:36 pm

US Federal Reserve policy makers are considering ways to raise interest rates while the central bank winds down its economic stimulus, the minutes of their latest meeting showed Wednesday.

At their April 29 and 30 meeting, the Federal Open Market Committee (FOMC) discussed for the first time options for eventually raising rates.

The US central bank’s key rate, the federal funds rate, has been between zero and 0.25 percent since December 2008.

“The committee’s discussion of this topic was undertaken as part of prudent planning and did not imply that normalization would necessarily begin sometime soon,” the minutes said.the dollars

Fed officials discussed several approaches to raising short-term interest rates when it becomes appropriate.

The meeting’s participants also looked at “controlling” the level of short-term interest rates once they rise, “during a period when the Federal Reserve will have a very large balance sheet” resulting from massive asset purchases to support the economy.

“Because the Federal Reserve has not previously tightened the stance of policy while holding a large balance sheet, most participants judged that the committee should consider a range of options and be prepared to adjust the mix of its policy tools as warranted.”

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