Fed officials maintain view of steady wage growth, minutes show

Federal Reserve officials raised their economic outlook in January but remained skeptical that wage growth will rise faster than expected, according to minutes from the central bank's latest policy meeting.

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Investors are closely watching the Federal Open Market Committee for clues about inflation forecasts and the timeline for interest rate hikes. The Fed has indicated that it will raise rates three times in 2018, though recent signs of inflation growth have raised expectations that a fourth increase is possible. The Fed is calling for inflation to edge higher in 2018 and stabilize around its 2% target.

Two days after the January meeting concluded, the Labor Department revealed that hourly wages during the month jumped at an annualized pace of 2.9%, the fastest growth rate since April 2009. Rising consumer prices also fueled expectations that inflation is heating up. The Consumer Price Index gained 0.5% in January, more than economists? average estimate.

In anticipation of higher interest rates, investors have sold off government debt. The benchmark 10-year Treasury yield has swiftly moved closer to the 3% mark, recently hitting a four-year high of roughly 2.9%. The yield on the 2-year Treasury note, which is more sensitive to Fed policy, has reached its highest level in nearly a decade. Yields rise as bond prices fall.

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