Fed minutes show some felt rate boosts too rapid

April 01, 1995|By New York Times News Service

WASHINGTON -- Federal Reserve officials were unanimous in deciding to raise short-term interest rates Feb. 1, but some of them initially expressed concern that the central bank was moving too quickly, according to minutes of the meeting released yesterday.

Although the Fed's rate-setting group, the Federal Open Market Committee, remained united then, the minutes suggest that sentiment may be building that seven rate increases over the last 14 months may have been enough to prevent rapid growth from leading to inflation.

While a majority of the committee wanted to raise rates immediately Feb. 1 and prevailed in doing so, "a few preferred to delay such an action pending the receipt within the next few weeks of significant new information that could help the committee to evaluate whether and to what extent the economic expansion might be slowing," the minutes said.

The Fed raised short-term rates by half a percentage point that day.

Paul L. Kasriel, a vice president and monetary economist at Northern Trust Co., a Chicago bank, said it remained possible that the Fed would raise rates again at the committee's next meeting May 23. But based on the minutes released yesterday, he said, "my suspicion is they won't be unanimous if they do."

The Federal Open Market Committee met Tuesday and left rates unchanged.

The committee's members are the seven governors of the Federal Reserve Board, the president of the Federal Reserve Bank of New York and, taking turns, four of the presidents of the 11 other Federal Reserve regional banks.

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