Fed: possible rate hike in June

The Federal Reserve leaves a door to a possible rate hike in June, which would judge "appropriate" if the macroeconomic data were to confirm an acceleration of the US economy in the second quarter (the GDP in the 1st quarter marked an abrupt deceleration).

This is revealed by the minutes of the last meeting of the FOMC, the monetary policy committee of the Fed, on 26 and 27 April. On that occasion, the bankers had preferred to leave interest rates unchanged in a band between 0.20% and 0.50%, after the first increase work last December.

The caution set also by the international turbulence has forced the Fed to reduce to two the possible increases in rates, which will operate this year and June looks increasingly likely, as signaled by higher probability indicated by futures contracts on Fed Funds. The key factors are the same: improvement in the labor market, inflation tending to the 2% target, the evolution of the international situation.

The meeting that the important factor was the elimination of the reference to "risk" posed by global economic and financial developments. Those developments, it reads in the press, would be "closely monitored." Also in April, the Fed has confirmed an improvement in labor market conditions, but adding that "the growth of economic activity appears to have slowed." In fact, on April 28 the figure for the first quarter GDP was widespread, grew by 0.5%, the slowest pace of growth in two years.