Improved economy likely to result in rate hike

Washington DC — Federal Reserve officials at their January meeting saw a brightening global economic picture and the effects of recently passed tax cuts raising the prospect for solid growth and continued interest rate increases.

The minutes of the Fed’s Jan. 30-31 discussions showed that the officials were more optimistic about the economy than they had been in December.

They noted a stronger U.S. and global economy as well as expectations that the Republican tax cuts enacted in December would boost growth.

The minutes released Wednesday said “a majority of participants noted that a stronger outlook for economic growth raised the likelihood that further gradual policy firming would be appropriate.”

The Fed held rates steady at the January meeting, which was the last to be led by Janet Yellen before her term as chair ended this month and she was succeeded by Jerome Powell.

Last month’s meeting preceded the stock market plunge in early February and the budget deal in Congress that will boost spending on military and domestic programs by an additional $300 billion over two years.