United States stocks retreat from records ahead of Fed minutes

Federal Reserve Governor Jerome Powell delivers remarks during a conference at the Brookings Institution in Washington

Many Fed policymakers said it may be appropriate to raise rates again "fairly soon" should jobs and inflation data come in line with expectations, according to the minutes of the Fed's January 31-Feb.

Officials added that gradually increasing the fed funds rate would give the bank "greater flexibility in responding to subsequent changes in economic conditions".

Federal funds futures for March delivery rose modestly on the perceived dovish minutes, implying traders saw a 18 percent chance of a rate increase at the FOMC's March 14-15 meeting, unchanged from late on Tuesday, according to CME Group's FedWatch program.

What it means: As interest rates normalize and the economic expansion matures, the Fed expects to stop reinvesting the proceeds of maturing bonds and mortgage debt, a step that would begin to shrink the huge amount of liquidity the central bank forced into the economy by buying the securities after the 2008 financial crisis. But the transcript also showed a mood of uncertainty over President Donald Trump's fiscal policy plans.

TJX, parent of Marshall's and TJ Maxx stores, rose 0.3 percent after reporting higher fourth-quarter earnings following a three percent rise in comparable store sales.

Those expectations and the prospect of increased government spending have also has helped boost stock prices. But while some members of the committee judged that a tighter labor market could trigger price increases in the future, others argued that inflation remains below the long-run target of 2 percent, and that the threat of rapid inflation was not imminent.

But some of the Fed officials cautioned that these changes "might not materialize".

The major USA indexes are trading around record highs, driven up since President Donald Trump's November 8 election by the promise of lower taxes, reduced regulations and higher infrastructure spending. The personal consumption expenditures price index rose 1.6 percent previous year; excluding food and energy, the index rose 1.7 percent.

A change economic conditions could come with a reversal in the lofty USA equity prices that have policy makers on watch.