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Fed Officials Say Economy Is Ready for Higher Rates - ABI

Robust economic growth has increased the confidence of Federal Reserve officials that the economy is ready for higher interest rates, according to an official account of the central bank’s most recent policymaking meeting in late January, the New York Times reported. The Fed did not raise its benchmark interest rate at the meeting on Jan. 30 and 31, but the account reinforced investor expectations that the Fed would raise rates at its next meeting in March. The account said that Fed officials have upgraded their economic outlooks since the beginning of the year and listed three main reasons: the strength of recent economic data, accommodative financial conditions and the expected impact of the $1.5 trillion tax cut that took effect in January. The Fed is seeking to raise rates gradually to maintain control of inflation without impeding an economic expansion that is nearing the end of its ninth year, one of the longest stretches of continuous economic growth in American history.

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