US rate-setters sound more hawkish note at March FOMC, minutes show

US central bankers were more confident on the economic outlook when they last met to decide on policy with several of the belief that at some point in about two years' time rates would need to rise above their normal longer-run value.

Central to the above, when they met on 20-21 March policymakers reached the conclusion that the White House's recently-enacted tax cuts were set to deliver a bigger than previously expected boost to activity.

"All members viewed the recent data and other developments bearing on real economic activity as suggesting that the outlook for the economy beyond the current quarter had strengthened in recent month," the meeting minutes read.

Even so, "most" participants at the Fed meeting described the pace of wage gains as as "moderate", with "a few" arguing that that meant "there was room for the labour market to strengthen somewhat further."

"A few" participants also believed the level of survey-based measures of inflation expectations remained too low to be consistent with the Committee's 2% target for inflation.

On the subject of the recent bout of volatility in global financial markets, "a few" policymakers were concerned that a lengthy period with the economy operating above its potential rate of growth might, over time, pose financial stability risks.

Also worth noting, "a number" of the Fed's highest-ranking officials also thought that uncertainty about whether the recently approved tax cuts would become permanent or about the implications of running wider government spending deficits represented sources of downside risk to growth.

Finally, the Fed's rate-setters commented on the expected increase in consumer prices over coming months due to negative so-called 'base' effects, as the impact of last year's drop in the cost of cellphone plans dropped out of the year-on-year comparison.

In itself, that, they said, "would not justify a change in the projected path for the federal funds rate."