Wall Street Journal (08/19/15) Jon Hilsenrath
The U.S. Federal Reserve is undecided about whether to raise interest rates at its September meeting. For months officials have implied that they intend to start raising short-term rates from near-zero before the end of the year; however, they have yet to provide any conclusive indication they will do so at their September policy meeting. Notes from the July meeting highlighted why no definite decision has been made.
The Fed has consistently stated that it will not increase rates until it is more confident inflation will rise towards its 2% target. According to the July notes, “some participants expressed the view that the incoming information had not yet provided grounds for reasonable confidence that inflation would move back to 2% over the medium term.” Some officials worry about moving too quickly, and then lacking the necessary tools to respond if unanticipated events should cause the economy to falter. Other officials, however, argue that increasing rates could convey confidence about the economic outlook.