Fed minutes point to more rate hikes quicker than the market anticipates

cnbc.com:

Federal Reserve officials earlier this month stressed the need to raise interest rates quickly and possibly more than markets anticipate to tackle a burgeoning inflation problem, meeting minutes released Wednesday showed. 

Not only did policymakers see the need to raise benchmark borrowing rates by 50 points, but they also said similar hikes likely would be necessary at the next several meetings 

They further noted that policy may have to move past a «neutral» stance in which it is neither supportive nor restrictive of growth, an important consideration for central bankers that could echo through the economy.

«Most participants judged that 50 basis point increases in the target range would likely be appropriate at the next couple of meetings,» the minutes stated. In addition, Federal Open Market Committee members indicated that «a restrictive stance of policy may well become appropriate depending on the evolving economic outlook and the risks to the outlook.»

The May 3-4 session saw the rate-setting FOMC approve a half percentage point hike and lay out a plan, starting in June, to reduce the central bank's $9 trillion balance sheet consisting mostly of Treasurys and mortgage-backed securities.

That was the biggest rate increase in 22 years and came as the Fed is trying to pull down inflation running at a 40-year high.

Market pricing currently sees the Fed moving to a policy rate around 2.5%-2.75% by the end of the year, which would be consistent with where many central bankers view a neutral rate. Statements in the minutes, though, indicate that the committee is prepared to go beyond there.

«All participants reaffirmed their strong commitment and determination to take the measures necessary to restore price stability,»