FEDERAL RESERVE/TAXES: “Federal Reserve officials in December debated whether looming tax cuts might require them to raise short-term interest rates more aggressively in 2018 than last year, when they lifted borrowing costs three times.
Officials expressed growing confidence in the strength of the labor market and the economy, according to minutes of the Fed’s Dec. 12-13 policy meeting, which were released Wednesday. Since the meeting, Congress approved and President Donald Trump signed into law a $1.5 trillion tax cut, which could muddy the central bank’s efforts to ensure the economy stays on an even keel…
The Fed is likely to leave rates unchanged at its next meeting, Jan. 30-31. Before the minutes were released, the market for federal-funds futures contracts, where traders bet on the path of interest rates, showed a 62% probability of a rate increase at the central bank’s second meeting of the year, in March.
The bigger question is how much more the Fed will raise rates through the rest of the year, and the answer largely turns on inflation.”
-Nick Timiraos, “Fed Minutes Reveal Uncertainties Over Tax Cuts,” The Wall Street Journal online, Jan. 4, 2018 09:51am