The members of the Federal Open Market Committee (FOMC) of the U.S. Federal Reserve Bank (the Fed) agreed that inflation would be more likely to reach the target of 2% due to a more positive outlook for the country's economy. Says the minutes of the regulator March 20-21 meeting.
In March, the Fed expectedly increased the federal funds rate by o.25 of a percentage point, to 1.5% - 1.75%. The regulator also increased the projections for GDP growth in 2018 and 2019 – up to 2.7% and 2.4% respectively.
“all participants agreed that the outlook for the economy beyond the current quarter had strengthened in recent months," the minutes said. "In additional, all participants expected inflation on a 12-month basis to move up in coming months." Many committee members expressed greater confidence that inflation would return to the level of 2% in the medium-term outlook.
Some members argued that it would be better to postpone increasing the rate until there is more information. Almost all participants agreed that it was still appropriate to continue a gradual course of raising the federal funds rate.