Fed's Low-and-Slow Strategy Tested by Business-Spending Pickup

U.S. business investment is finally showing signs of life, and the Federal Reserve may have to reconsider its low-and-slow approach to raising interest rates if such spending becomes a vital force for the economy.

Underneath a weak reading of first-quarter gross domestic product on Friday, non-residential investment in structures, equipment and intellectual property grew at a 9.4 percent annualized pace, the fastest since the fourth quarter of 2013. While the Bureau of Economic Analysis attributed the increase to a significant jump in “mining exploration, shafts, and wells” -- which reflects a surge in oil-and-gas drilling -- almost all categories of investment showed gains.