Many officials of the US Federal Reserve said the central bank could be forced to lift rates higher than expected if Congress passed conomy-boosting tax cuts next year, according to minutes of the Fed’s final policy meeting of 2016.
Almost all Fed officials meeting on December 13-14 said the risks of growth surpassing their forecasts had grown because of the possibility of more “expansionary” fiscal policy under president-elect Donald Trump and the Republican-controlled Congress.
However policymakers also stressed that it was too soon to jump to firm conclusions about what fiscal policy would actually look like. “Participants agreed that it was too early to know what changes in these policies would be implemented and how such changes might affect the economic outlook,” the minutes to the meeting said.