Fed's minutes pave the way for a rate hike relatively soon

The Federal Reserve released the minutes of its Federal Open Market Committee's last meeting, at which it kept overnight interest rates at between 0.50% and 0.75% after increasing them by 25 basis points in the last meeting of 2016.
 
The minutes showed that the data gathered since the December 13-14 meeting of 2016 reflect growth in the labor sector and continuing moderate recovery in economic activity, and labor gains remain strong, while unemployment rates settle near recent lows. Household spending is growing moderately, while fixed-rate investments remain fragile, as consumer and business confidence improve.
 
The members also pointed to the rise in inflationary pressures, but still below the bank's 2% long-term target, as inflation indices didn't change for the long term towards balance, as the committee reasserts her resolve to bolster job opportunities and stabilize prices, while expecting economic activity to expand moderately alongside gradual policy changes. The labor sector is expected to show more strength in the coming period, while inflation is expected to hit 2% in the medium term, while maintaining that short-term risks remain balanced, as the committee continues to monitor inflation and global economic and financial developments. 
 
As of 08:28 GMT, the dollar index, tracking the greenback against a basket of currencies, rose to 101.51 from the opening of 101.37, with an intraday high at 101.72, and a low at 101.25.
 
The Fed pointed to the current inflation and labor conditions and forecasts as a preface for keeping interest rates unchanged at between 0.50% and 0.75%, while keeping the policy accommodative in order to offer support to the labor sector and for inflation until it reaches 2%, and as for the timing of future policy changes, it will depend on the economic data and how employment and inflation fare.
 
Therefore, FOMC members expect the economic climate to change in a way that allows for a gradual tightening of policy, with gradual increases to interest rates until it reaches just below the long-term target, while asserting the policy path is still dependent on data, as the committee intends as well to reinvests its debt and mortgage-backed security holdings in public auctions to trim them down from their current high levels.
 
It's worth mentioning that Fed Chair Janet Yellen warned from delaying policy tightening for a long time in her biannual Congress testimony, raising the odds for another rate hike soon as the economy rounds further, with traders' eyes fixes on the next March meeting, at which policymakers will release their forecasts for three-year unemployment, inflation,growth, and interest rates.