WASHINGTON — Federal Reserve officials agreed last month that they would begin raising interest rates only when measures of the economy’s health and inflation signaled the time was right.
Minutes of the Fed’s discussions at the Sept. 16-17 meeting released Wednesday also showed that officials expressed increased concerns about the impact of weak European growth and a strengthening dollar to U.S. growth prospects.
Stocks rose immediately after the release of the minutes. Investors appeared to take the proceedings as a sign that the Fed was in no hurry to raise interest rates. The Dow Jones industrial average was up around 170 points in afternoon trading.
The officials also worried that any change to the wording of the guidance could be misinterpreted as a fundamental shift in the Fed’s stance on interest rates, which could trigger an unintended rise in market rates.
For now, the Fed decided to leave unchanged its statement saying that any increase in the short-term rate that it controls would not occur until a “considerable time” after it ends its monthly bond purchases.
The minutes showed that there was a discussion about how the forward guidance might evolve at coming meetings. Many participants indicated a preference for clarifying that changes in the guidance would be closely linked to changes in how the economy is performing.
The Fed has been emphasized that the timing on interest rates will depend on officials’ views on how close the economy is to achieving the Fed’s goals for maximum employment and inflation running at an annual rate of 2 percent.
For the past two years, inflation has been running well below 2 percent, giving the Fed room to keep rates at a record low in an effort to bolster the economy and generate more jobs.
The government reported last week that the unemployment rate in September fell to a six-year low of 5.9 percent, closer to the Fed’s goal of an unemployment rate in a range of 5.2 percent to 5.5 percent.
BY MARTIN CRUTSINGER, AP Economics Writer