Uncertainty about the future of the U.S. economy is rising, according to Federal Reserve officials.
Members of the central bank were not certain in their January monetary policy meeting how to interpret turbulent stock markets and other flagging economic indicators, minutes from the meeting released Wednesday afternoon indicate. The minutes suggest the Fed was less confident about its earlier plans for raising interest rates throughout 2016.
Falling oil prices and signs of trouble in China and elsewhere yielded “unclear” hints about the strength of the economy, the minutes read, but the Fed officials at the meeting “agreed that uncertainty had increased, and many saw these developments as increasing the downside risks to the outlook.”
Not enough members agreed that the outlook had shifted enough to say in the post-meeting statement that the risks were mostly to the downside, meaning that the Fed would delay or reverse its planned interest rate increases. But they were convinced that uncertainty about the direction of the economy had increased.
Since the Fed raised its interest rate target from zero in December, stock market turmoil and weak statistics on industrial production and spending have been enough for markets to significantly discount the possibility of the Fed further raising interest rates this year.
The Fed’s next scheduled monetary policy meeting is scheduled for March 15 and 16 in Washington.
