Fed officials sketching out post-liftoff debate

New York

FEDERAL Reserve officials, who are expected to raise interest rates next month, are already sketching out positions for a post-liftoff debate that may blur the lines between inflation "hawks" and "doves" and make the Fed's policy less predictable.

With unemployment steadily falling, Fed policymakers have been waiting for a return of healthy price and wage increases. But those have yet to appear, prompting some within the central bank to begin doubting whether their tried and tested economic models still work.

Fed officials' private and public comments show that the debate now centres on whether the US economy is returning to its old robust self, or whether tepid growth and resulting weak inflation and slow wage increases have becom…