FOMC Minutes: Fed officials debated over early rate hikes

http://online.wsj.com/article/SB10001424052702304275304579393141610162738.html?mod=rss_economy Conversation at the Federal Reserve's most recent policy meeting turned to something that hasn't been a serious topic for years: the possibility of interest-rate increases in the near future.

The Fed has held short-term interest rates near zero since December 2008, near the height of the financial crisis, and Chairwoman Janet Yellen shows no appetite for raising them soon. Investors, seeing that, generally don't see Fed rate increases until well into 2015, a view also held by many officials.

Still, a "few" Fed officials argued at a Jan. 28-29 policy meeting that increases might be needed soon to prevent the economy from overheating, according to minutes of the meeting released Wednesday. These officials were most likely from the Fed's band of policy "hawks" who have largely failed in resisting the central bank's easy-money policies.

The fact that the subject came up at all in January shows how the central bank's policy debate is slowly and subtly evolving and might offer the first glimmers on a distant horizon of a Fed move. Surprising declines in the unemployment rate in recent months have forced officials to start discussing their plans for eventual rate hikes, what will impel them to act and how to guide the public about their likely course in the months ahead.

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