Federal Reserve officials saw June interest rate hike unlikely: minutes

In this May 6, 2015 file photo, Federal Reserve Chair Janet Yellen speaks at the Institute for New Economic Thinking Conference on Finance and Security at the International Monetary Fund (IMF) in Washington.

WASHINGTON – U.S. Federal Reserve officials believed it might be premature to raise interest rates in June and that a bump in inflation had been offset by a weaker labour market and softer data, according to minutes in the central bank\’s April policy meeting.

\”Many participants, however, thought it unlikely that the data obtainable in June provides sufficient confirmation the conditions for raising (rates of interest) had been satisfied …,\” said the minutes, which were released on Wednesday.

U.S. Treasury prices were largely unchanged after the release of the minutes, while short-term rate of interest futures and TIPS inflation break-even rates held firm, as did stocks.

The minutes in the April 28-29 meeting of the Fed\’s policy-setting committee also showed most participants expected the U.S. economy to pick up pace after a slowdown within the first quarter which labour market conditions would improve.

But Fed officials flagged a number of concerns weighing on the central bank, including disappointment that falling oil prices did not spur consumer spending around had been hoped. They also cited economic worries in China and Greece.

The minutes largely reflected the Fed\’s April policy statement, which pointed to economic softness but described the slow growth as reflecting, in part, transitory factors for example bad weather and a U.S. port disruption.