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Fed to likely hike interest rates this year: minutes

Central bank kept target rate flat at September meeting

October 12, 2016 05:15PM

Fed Chair Janet Yellen

Janet Yellen

The Federal Reserve came close to raising interest rates in its September meeting and is likely to do so in the near future, newly released minutes show.

“Several members judged that it would be appropriate to increase the target range for the federal funds rate relatively soon if economic developments unfolded about as the committee expected,” the minutes read.

At its Sept. 20-21 meeting, the central bank decided to keep the target federal funds rate – a benchmark interest rate for overnight interbank loans – between 0.25 and 0.5 percent.

“The probability of a rate hike is very likely by the end of the year,” University of Chicago economist Randall Kroszner told Bloomberg.

Higher short-term rates can put upward pressure on long-term bond and mortgage rates, which in turn impact the U.S. real estate market. [Bloomberg]Konrad Putzier

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