Fed officials discuss rate hikes that could slow growth

MARTIN CRUTSINGER
Washington.- Federal Reserve officials last month said they expect to keep raising interest rates and suggested that by the next year, they could be high enough that they could start slowing growth, according to minutes of their discussion released Thursday.

While noting a strong economy, Fed officials appeared vigilant about emerging risks, especially trade tensions, and the dangers of an economy that might overheat.

The officials noted heightened concerns from businesses about President Donald Trump’s get-tough trade policies and that some executives had already scaled back future spending plans because of the uncertainty.

They also said they were monitoring changes in market-set interest rates. A narrowing in the gap between short-term and long-term rates has been an accurate predictor of downturns in the past. The minutes covered the discussions at the Fed’s June 12-13 in which the central bank boosted its key rate for a second time this year to a new range of 1.75 percent to 2 percent.

Fed officials also upped their projection for the number of rate hikes they plan to make this year from three to four. The Fed dropped language it had been using for a number of years promising to keep rates at levels that would boost economic growth “for some time.”