Watch CBSN Live

Fed "hawks" push for reduced economic stimulus

WASHINGTON - As the U.S. economy strengthens, the Federal Reserve is edging toward starting to raise interest rates.

Some officials with the central bank think the economy is improving fast enough that the Fed will soon need to signal a change in the extraordinary support it's been providing in the form of ultra-low interest rates, an account of the Fed's July 29-30 meeting suggest.

"Overall, the minutes provide tentative support to our view that interest rates will rise in March and that they will then rise at a faster pace than widely expected," said Paul Dales, senior U.S. economist with Capital Economics, in a client note.

Minutes of the discussion show that some officials thought the economy was improving enough that the Fed would need "to call for a relatively prompt move" toward reducing the support it has been providing.

Otherwise, they felt the Fed risked overshooting its targets for unemployment and inflation. In the end, the Fed made no changes at the July meeting. It approved on a 9-1 vote keeping its current stance on interest rates. But the minutes indicated rising support for a change.

Stocks rose after the Fed minutes were released, with the Dow Jones industrial average rising 68 points, or 0.4 percent, to 16,988. The S&P 500 and Nasdaq composite also inched up.

View CBS News In