Fed signals June rate hike likely

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Here's what's in Trump's budget

Get ready for the third rate hike in seven months.

Federal Reserve officials indicated they may raise rates again in June, according to minutes from their meeting in May released on Wednesday.

"Most participants judged...it would soon be appropriate," to raise rates if the economy stays on track, according to the minutes.

That sentiment was widely expected by investors, who have already been betting that there is about an 80% chance of a June rate hike.

Fed officials also indicated that they would likely start to wind down its $4 trillion balance sheet this year. The Fed bought trillions of dollars in debt during the housing and financial crisis and the recession that followed to help the economy recover. The officials say they want to raise rates a little more before they start selling that debt.

A June rate increase would mark a faster pace for the Fed. It raised rates in December 2015 for the first time in nearly a decade, then again an entire year later in December 2016, followed by another one in March.

Related: Yellen's solution for the US economy: More working women

Those rate hikes reflect the Fed's confidence in an economy that has recovered well from the Great Recession. In the aftermath of the recession, the US unemployment rate hit 10%. Today unemployment is very low at 4.4%.

"The simple message is, the economy is doing well," Fed Chair Janet Yellen said at a March press conference.

However, Yellen is the first to acknowledge the US economy still faces challenges, such as slow growth, sluggish wage growth and millions of workers who feel left out of the recovery from the recession.

With America coming up on 8 years of economic expansion, the Fed's medicine isn't needed as much.

"The patient isn't fully recovered -- the economy hasn't gotten back to its long term potential, but it's no longer sick so we need to get the patient off the medicine," says Ernesto Ramos, head of equities at BMO Global Asset Management.

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