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Fed Minutes Likely to Reveal Debate on June or July Rate Hike

The Federal Reserve will shed more light this week on the risks of either raising interest rates amid global uncertainty or leaving them on hold again as the U.S. economic outlook improves.

Minutes of the Federal Open Market Committee’s April 26-27 meeting will be released at 2 p.m. on Wednesday. Several regional Fed presidents said last week that a move could be possible in June or July, though there’s been no recent public comment from Chair Janet Yellen or her number two, Stanley Fischer. Yellen will speak at Harvard University on May 27 and Fischer delivers remarks Thursday in New York.

Investors see less than a 20 percent chance the Fed will hike at either of its next two meetings, according to pricing in federal funds futures. The minutes could show how many policy makers wanted to get on with rate increases, versus those arguing for caution. It may also unpack the debate around the risks to the U.S. and global economic outlook.

“The April FOMC statement was an attempt by the committee to balance out the odds of a June move a little bit,” said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC in New York. “They weren’t ready to say they wanted to go in June, but they felt like the odds priced in June were too low.”

Global Outlook

At the conclusion of its April 26-27 meeting in Washington, the FOMC left its benchmark rate unchanged...