US Fed policy makers in the grip of uncertainty about Trump’s fiscal policies
Washington — It’s a challenge Federal Reserve officials haven’t talked about in years. The economy could start to run faster than they expect, forcing them to raise rates at a quicker pace. Minutes from their December 13-14 policy meeting released on Wednesday in Washington show US central bankers preparing for a labour market that could stage a "sizable undershooting" of the jobless level that keeps prices stable in the longer run. That may push them to "raise the federal funds rate more quickly" than currently expected to keep inflation in check. The long shadow stalking the committee’s faster growth scenario is that of the incoming president, Donald Trump, and his tax reform and fiscal stimulus proposals, although he was never mentioned in the minutes by name. Almost all participants "indicated that the upside risks to their forecasts for economic growth had increased as a result of prospects for more expansionary fiscal policies in coming years". That said, the record of the mee...
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