Fed worried about inflation

Historic decision of the Federal Reserve to raise US interest rates for the first time in almost a decade, was taken in the background of concerns about inflation, reveal the minutes of the December meeting of regulators.

According to the document "a number of members of the Open Market Committee expressed concerns about the risks that threaten the inflation perspectives." The institution stressed that they will continue to carefully monitor consumer prices.

Markets were convinced that the Fed will start tightening monetary policy in December, but the published evening protocols on Wednesday indicate that the decision was "on the edge." Now strategists try to anticipate how will continue the raise of interest rates in 2016 and very few expect another step in January, but the majority relies on a new increase in March. Whether this will happen depends on the incoming data. Generally, the central bank believes that weak inflationary pressures are due to temporary factors such as low oil prices, but at least for now the hopes for a convincing increase in consumer prices does not take place.

According to the Federal Reserve, the US economy will continue to expand at a steady, though not steep pace in 2016. Regulators expect domestic consumption to compensate the weakness of the global economy, which hinders exporting companies to sell their products abroad.

The central bank expect the labor market to continue to improve and the increase in employment and wages put upward pressure on inflation.

"Almost all participants in the meeting considered that there are compelling reasons to expect growth of inflation to the target level of 2% over the medium term".