Fed Minutes Put Fear in Black and White

While most investors had expected several more interest rate hikes this year, confirmation from the Federal Reserve came as an unwelcome surprise Tuesday.

In the minutes of the Fed's Dec. 14 committee meeting, central bank officials said short-term rates are too low at 2.25% and that inflation could become a problem unless further action is taken.

"The FOMC minutes for the December meeting were considerably more hawkish than generally expected," said Stephen Stanley, an economist at RBS Greenwich Capital. "The committee has clearly become much more confident in the sustainability of the expansion." ...