Fed officials hopeful for economic boost from tax cuts

FILE - This Wednesday, Aug. 2, 2017, file photo shows the Federal Reserve Building on Constitution Avenue in Washington. The Federal Reserve releases minutes from its December meeting, on Wednesday, Jan. 3, 2018. (AP Photo/Pablo Martinez Monsivais, File)

Pablo Martinez Monsivais

WASHINGTON (AP) — Federal Reserve officials were hopeful last month that the major tax overhaul taking effect this year will boost the economy. But they were split over how fast they will need to raise interest rates in 2018.

Minutes of the Fed's Dec. 12-13 meeting show that officials believed the tax cuts would drive consumer spending and increased business investment, though they expressed uncertainty over the magnitude of the boost.

The minutes indicate disagreement among Fed officials over how many times the Fed should raise its benchmark interest rate in 2018. Some felt that the projection of three rate hikes might prove too aggressive and prevent inflation from returning to the Fed's 2 percent target. Others felt more hikes might be needed.

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