WASHINGTON — Federal Reserve officials at their last policy meeting debated an earlier-than-expected move in raising interest rates, suggesting the central bank may be shifting to a more aggressive stance in light of the recent pick-up in job growth and inflation.
Although Fed officials remain divided in their assessment of the labor market, the minutes from the last policy meeting, released Wednesday, reflected a growing acknowledgment of the recent progress in the employment situation as well as the rise in inflation.
Fed Chairwoman Janet L. Yellen has repeatedly indicated the labor market isn’t as strong as the rapid drop in the jobless rate might suggest. The unemployment figure has fallen to 6.2 percent from 7.3 percent in July 2013, but Yellen has pointed to the large number of involuntary part-time employees and high long-term joblessness – as well as stagnant wage growth in general – as signs of a still-weak job market with a lot of slack, or excess supply of workers relative to demand.
Those points were reiterated in the last Fed meeting three weeks ago, but the minutes said that “many” policy members noted the characterization of the labor market may have to “change before long.” Some of these members are concerned the Fed will wait too long before raising rates, and thus sending inflation shooting higher.
Yellen will give a speech Friday at an annual central bankers’ conference in Jackson Hole, Wyo.