Fed minutes: Trump policies could lead to rate hike ‘fairly soon’ – CNBC

Others cautioned that the policies and whether they will be implemented are still unknowns, and the meeting concluded without action on rates, which is what the market expected.

One example of the policy dilemma was “upside risks” that would come with “more expansionary fiscal policy or a more rapid buildup of inflationary pressures,” as well as the downside risks of an appreciating U.S. dollar.

Ultimately, the Fed decided not to act on rates until they had a clearer view on the effects the new policies would have.

“Most participants continued to see heightened uncertainty regarding the size, composition, and timing of possible changes to fiscal and other government policies, and about their net effects on the economy and inflation over the medium term, and they thought some time would likely be required for the outlook to become clearer,” the minutes said.

However, not everyone was on board.

There were “a couple” members who thought the Fed needed to act anyway, because there were other factors at play besides policy that could spur growth higher than the committee’s expectations. One member said hiking rates now would give the Fed more flexibility ahead. Eventually, the decision not to hike passed unanimously.

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