Federal Reserve officials expressed confidence at their most recent meeting about the state of the U.S. economy and figured interest rates likely would remain unchanged for a while, according to minutes released Wednesday.
That comes even as financial markets are pricing in a near-certainty of at least one cut this year and possibly two.
The central bank's policymaking group voted at the Jan. 28-29 meeting to leave its benchmark overnight funds rate in a range between 1.5% and 1.75%. In coming to that decision, Federal Open Market Committee members noted that the outlook for the economy had gotten "stronger" just since the previous forecast in December.
Officials did make several mentions of possible dangers from the coronavirus, though the spread of the disease had just become an issue at the time of the meeting.
"They expected economic growth to continue at a moderate pace, supported by accommodative monetary and financial conditions," the minutes said. "In addition, some trade uncertainties had diminished recently, and there were some signs of stabilization in global growth. Nonetheless, uncertainties about the outlook remained, including those posed by the outbreak of the coronavirus."
Holding the line on rates "would give the Committee time for a fuller assessment of the ongoing effects on economic activity of last year's shift to a more accommodative policy stance and would also allow policymakers to accumulate further information bearing on the economic outlook."
The FOMC cut rates three times in 2019 but did not move in its previous two meetings. Though traders lately have been pricing in a high chance of another cut by September and about a 50-50 chance of an additional move lower by the end of the year, the minutes noted that "current stance of monetary policy was appropriate."...