Fed minutes show strong backing for 0.50% hikes in June, July

Most Federal Reserve officials agreed at their gathering this month that the central bank needed to tighten in half-point steps over the next couple of meetings, continuing an aggressive set of moves that would leave policy makers with flexibility to shift gears later if needed.

“Most participants judged that 50 basis-point increases in the target range would likely be appropriate at the next couple of meetings,” minutes of the Fed’s May 3-4 meeting released Wednesday in Washington showed. “Many participants judged that expediting the removal of policy accommodation would leave the committee well positioned later this year to assess the effects of policy firming and the extent to which economic developments warranted policy adjustments.”

Treasury yields fluctuated, stocks rose and the dollar pared its gain following the report. Markets continued to show traders pricing in 100 basis points of rate hikes over the next two meetings.