The minutes of the Fed meeting, published after a standard three-week delay, portrayed an economy that appears to be gaining strength, although it is still far from booming. The unemployment rate was little changed in the last year, standing at 4.8 percent in January, even as the economy added an average of 190,000 jobs a month in the second half of 2016, indicating that more people were returning to work.
The minutes also cited “a high level of optimism” among business executives, which was attributed to “the expectation that firms would benefit from possible changes in federal spending, tax and regulatory policy.” For the most part, however, companies were still waiting for Washington. Although a few companies had reported increased capital spending, the minutes said that most, “while optimistic, intended to wait for more clarity about federal policy initiatives before adjusting their capital spending and hiring.”
Financial markets also remained calm. Things were so quiet that some Fed officials had turned to fretting about the lack of excitement. By some measures, financial conditions are easier now than before the Fed raised its benchmark rate in December.
Some officials worried, the minutes said, that “the low level of implied volatility in equity markets appeared inconsistent with the considerable uncertainty attending the outlook.”
The Fed left rates unchanged in February after raising its benchmark rate in December to a range of 0.5 percent to 0.75 percent and predicting three rate hikes in 2017. Fed officials at the meeting discussed whether improving conditions warranted faster movement, but “participants generally characterized their economic forecasts and their judgments about monetary policy as little changed since the December meeting,” the minutes said.
In recent weeks, investors have assessed the Fed as more likely to raise rates in the first half of the year, although the chances that it will do so at its next meeting, in March, remain low.
“It’s not obvious that ‘fairly soon’ means March,” said Samuel D. Coffin, an economist at UBS. He said that the Fed was “growing gradually more confident in its economic expectations” but that there was little sign of urgency in the account of the meeting.
The minutes portrayed some of the 12 presidents of regional reserve banks as increasingly ready to move faster on rates. But the minutes also indicated that the voting members — five governors and five of the presidents — felt less urgency. That core group appeared to remain committed to “gradual adjustments in the stance of monetary policy.”
Patrick T. Harker, president of the Federal Reserve Bank of Philadelphia and one of the voters this year, said in a speech Tuesday that his outlook had not changed.
“Given the state of the economy — more or less back to normal — I continue to see three modest rate hikes of 25 basis points each as appropriate for 2017, assuming things stay on track,” Mr. Harker said. He added, however, that a March increase remained possible.
One major question is whether the labor force will continue to grow. Some officials see room for stronger economic growth to continue pulling people into the work force: The share of American adults between 25 and 54 who are working or seeking work remains low by historical standards. But other Fed officials contend that the Fed’s stimulus campaign has reached its limit. They worry that maintaining low interest rates could drive unemployment down to an unsustainable level and lead to more inflation.
The minutes said the Trump administration’s economic plans had injected “considerable uncertainty” into the business of forecasting economic growth. But Fed officials have emphasized that they will wait to see what happens before adjusting their plans.
The Fed also announced a few housekeeping changes, primarily of interest to its close watchers. Fed officials are now prohibited from speaking about monetary policy for 10 days before a policy-making meeting, rather than one week. The Fed also said it would expand the information provided with its quarterly economic forecasts to include an illustration of the uncertainty surrounding the projections.
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