Business

US interest rates could rise in June

US Federal Reserve building in Washington DC Image copyright Getty Images

The US Federal Reserve could increase interest rates next month if the economic data support such a move, the central bank's latest minutes show.

But policymakers suggested they thought investors had not fully accepted such a move could come that soon.

The bank will look for signs the economy, employment and inflation are firming before taking action.

The Fed remains wary of external factors, including a possible UK vote to leave the European Union.

The Fed next meets a week before the UK referendum on staying in or leaving the EU.

Some analysts suggested that the Fed may even delay a decision on rates for fear of unsettling global markets as possible Brexit looms.

Sal Guatieri, senior economist at BMO Capital Markets, said: "A super-cautious [Fed Chair Janet] Yellen might well wait for more convincing evidence of a sustained pickup in the economy and a resolution of Brexit risks before pulling the trigger in July."

Pick-up

The bank has kept interest rates between 0.25% and 0.5% since December.

The Fed minutes said recent economic data made them more confident inflation was moving up towards its 2% target.

The US government said this week that the consumer price index rose 0.4% in April, reflecting higher energy costs.

Although recent figures showed the US economy only grew at 0.5% in the first quarter - a two-year low - the Fed's committee said that recent rises in employment suggested that would pick up.

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