Janet Yellen's
premium on consensus may lead to a Federal Reserve decision the chair
hasn't yet endorsed, as a near majority aligns in favor of a possible
June interest rate hike.
Seven of the Fed's current
17 members have now said they at least want the option of a June
tightening on the table, or have pushed in general for an earlier
increase amid an expectation that wages and inflation will turn higher.
By contrast, there's a dwindling core of officials who say publicly that the economy and labor markets in particular still have a long way to go -- only four Fed members have in recent weeks clearly said that rate hikes won't be appropriate until much later in the year or even into 2016.
The five members of the Fed's Washington-based board of governors, including Yellen, have spoken less definitively, though governors including Jerome Powell have said they expected strong job growth to continue.
Not all of the seven who point to June vote this year on the Fed's ten-member policy setting committee, but all participate in policy discussions.
The Fed is likely at its March 17th and 18th policy meeting to remove language saying the central bank will take a "patient" approach to raising rates, taking away the final verbal constraint to a June rate hike, current and former Fed officials say.
"It's likely they remove 'patient' in March," said David Stockton, a former Fed research director now at the Peterson Institute for International Economics. "Even if Yellen might not, left to her own devices, be ready to move on rates, there is probably a growing sentiment that the time is getting closer."
The Fed hasn't raised interest rates since 2006, and Yellen's career-long focus on labor markets has led some including Stockton to say she would resist an early rate increase, risking higher inflation in favor of trying to generate more jobs.
Investors have generally expected the Fed to be later in its first rate hike and to move more slowly than policymakers have indicated.
Data on Fed funds futures contracts collected by CME Group's Fedwatch have shifted between September and October over the past week as the likely month of the Fed's initial increase.
By contrast, there's a dwindling core of officials who say publicly that the economy and labor markets in particular still have a long way to go -- only four Fed members have in recent weeks clearly said that rate hikes won't be appropriate until much later in the year or even into 2016.
The five members of the Fed's Washington-based board of governors, including Yellen, have spoken less definitively, though governors including Jerome Powell have said they expected strong job growth to continue.
Not all of the seven who point to June vote this year on the Fed's ten-member policy setting committee, but all participate in policy discussions.
The Fed is likely at its March 17th and 18th policy meeting to remove language saying the central bank will take a "patient" approach to raising rates, taking away the final verbal constraint to a June rate hike, current and former Fed officials say.
"It's likely they remove 'patient' in March," said David Stockton, a former Fed research director now at the Peterson Institute for International Economics. "Even if Yellen might not, left to her own devices, be ready to move on rates, there is probably a growing sentiment that the time is getting closer."
The Fed hasn't raised interest rates since 2006, and Yellen's career-long focus on labor markets has led some including Stockton to say she would resist an early rate increase, risking higher inflation in favor of trying to generate more jobs.
Investors have generally expected the Fed to be later in its first rate hike and to move more slowly than policymakers have indicated.
Data on Fed funds futures contracts collected by CME Group's Fedwatch have shifted between September and October over the past week as the likely month of the Fed's initial increase.
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