When the Federal Reserve last month adopted a new “patient” approach to monetary policy, it gave no specific guidance about how long its policy pause would last, or how many more interest-rate increases, if any, were in the offing.
This week, as disappointing US retail sales and industrial production data raised the prospect that the US economy will slow more quickly than expected, three Fed policymakers gave an answer: one rate hike, or perhaps none at all.
It is not clear how widely those views are shared among all 17 Fed policymakers. Several other policymakers speaking this week were careful not to say how long they expected their own patience on rates to last. The first broad read of their views will come in March, when the Fed next releases forecasts for the economy and rates.
But the projections delivered this week - for one rate hike this year from both Atlanta Federal Reserve Bank President Raphael Bostic and Philadelphia Fed President Patrick Harker; and for perhaps none at all, from San Francisco Fed President Mary Daly - suggest that several at the US central bank see little need to brake the economy for some time yet.
If that view is widely held, the Fed's March forecasts could show a suddenly flatter path for interest rates that better matches its new 'patient' policy. In December, when the Fed raised interest rates a fourth time that year, most Fed policymakers penciled in two more rate hikes for this year.
“If the economy evolves as I just said I expect it to - 2 percent growth, 1.9 percent inflation, no sense that (price pressures are) going up, no sense that we have any acceleration - then I think the case for a rate increase isn't there” this year, Daly told the Wall Street Journal in an interview.