Janet Yellen, then-vice chairman of the U.S. Federal Reserve, right, and Ben S. Bernanke, then-chairman of the Fed, attend a meeting in 2013.Andrew Harrer/Bloomberg
Federal Reserve policy makers last month were split over whether they would raise interest rates in June, a debate that occurred before recent disappointing payroll figures, minutes of their most recent policy meeting showed.
"Several participants judged that the economic data and outlook were likely to warrant beginning normalization at the June meeting," according to minutes of the March 17-18 Federal Open Market Committee session released Wednesday in Washington.
Others argued that energy-price declines and the dollar's appreciation would continue to curb inflation, suggesting that a rate increase should be delayed until later in the year. A couple said the economy probably wouldn't be ready for tighter policy until 2016. The minutes don't identify the participants or give precise numbers of those holding a certain view.
In its statement following the March meeting, the FOMC dropped a pledge to be "patient" as it considered the first rate rise since 2006, while also reducing forecasts for the path of increases. Fed Chair Janet Yellen has since said that borrowing costs are likely to be raised gradually, without following a predictable pattern.
Stocks initially erased gains following the report, then resumed their climb. The Standard & Poor's 500 Index was up 0.3 percent to 2,083.32 at 2:19 p.m. in New York.
The Fed also said in its March statement that it will be appropriate to raise rates once it has seen further labor-market improvement and it's "reasonably confident" inflation is likely to move back up toward its 2 percent target.
The minutes revealed some details about what would give officials that confidence.
Energy prices
"Further improvement in the labor market, a stabilization of energy prices and a leveling out of the foreign-exchange value of the dollar were all seen as helpful in establishing confidence that inflation would turn up," the minutes showed.
The FOMC in March said job gains had been "strong" and that labor-market conditions had "improved further," even as growth "moderated somewhat."
Since the meeting, economic data have suggested the economy cooled as a result of unusually harsh winter weather, tepid overseas markets and a slowdown in energy-related capital investment.
A government report last week showed payrolls climbed by 126,000 in March, breaking a yearlong string of monthly gains in employment exceeding 200,000, which was the longest such stretch since 1995.
"There are strong arguments for being a little on the late side," in raising rates, New York Fed President William C. Dudley said earlier Wednesday in New York.
The Bloomberg Dollar Spot Index has advanced about 18 percent in the past year, keeping downward pressure on inflation by lowering the cost of imported goods.
Prices as measured by the Fed's preferred gauge rose just 0.3 percent in February from a year earlier, and inflation has languished below the central bank's 2 percent goal for 34 straight months.