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Minutes show Fed wrestling with conflicting economic trends

Money 2It remains unclear when the Federal Reserve will raise short-term interest rates, after the release of the minutes of its Oct. 28-29 meeting today, said Jia Liu, research fellow at the American Institute for Economic Research.

The release, which typically comes three weeks after the Fed’s meetings, showed the group wrestling with conflicting signals in the economy. An improving job market suggests higher interest rates, Liu said. “But lower oil prices, weak overseas economic growth, and an appreciating U.S. dollar put downward pressure to inflation,” suggesting an argument against raising rates, Liu said.

Liu said that even though the interest rate policy is still up for debate, she is inclined to believe the Fed will stick to the public expectation formed by its forward guidance that it will raise short-term rates in the middle of next year. Federal Reserve Chairwoman Janet Yellen “is an advocate of policy transparency,” Liu said.

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