In minutes from their policy meeting three weeks ago released Wednesday, Fed officials said that aggressive half-point rate hikes, rather than traditional quarter-point increases — “could be appropriate” multiple times this year. At last month’s meeting, many of the Fed policymakers favored a half-point increase, the minutes said, but held off because of the uncertainties created by Russia’s invasion of Ukraine.
Financial markets now expect much steeper hikes this year than Fed officials had signaled as recently as their meeting in mid-March. Chair Jerome Powell opened the door two weeks ago to increasing rates by as much as a half-point at upcoming meetings, rather than by a traditional quarter-point. The Fed hasn’t carried out any half-point rate increases since 2000. Lael Brainard, a key member of the Fed’s Board of Governors, and other officials have also made clear that such sharp increases are possible. Most economists now expect the Fed to raise rates by a half-point at both its May and June meetings.