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U.S. Federal Reserve worried by impact of global turmoil on economy, minutes show

U.S. Federal Reserve Chair Janet Yellen.

WASHINGTON – Federal Reserve policymakers expressed growing concerns in their meeting last month about potential threats towards the U.S. economy, including turbulence in markets, plunging oil prices and slowing development in China and other emerging markets.

Minutes of their discussions released Wednesday showed Fed officials acknowledging that the developments managed to get difficult to forecast growth and inflation prospects. As a result, they decided that it could be prudent to defer a hike in interest rates.

While Fed officials continued to express confidence within the strengthening labour market, they were less bullish on other areas of the economy for example manufacturing.

“Most participants established that it was hard to judge at this point whether the outlook for inflation and economic growth had changed materially, but they thought that uncertainty all around the outlook had increased because of because of recent financial and economic developments,” the minutes said.

Its brief policy statement removed language it absolutely was by using their officials judged the risks facing the economy as “balanced.” Most Fed officials felt there is not yet enough evidence to say the total amount of risks had “changed materially,” though some officials did believe the down-side risks had increased, based on the minutes.

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