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Fed minutes show concern with global economy and US low inflation persists

Thursday, January 7th 2016 - 08:42 UTC
Full article 7 comments
Fed chairwoman Janet Yellen said she was confident inflation would reach the 2% target and that global factors would not derail the US economy. Fed chairwoman Janet Yellen said she was confident inflation would reach the 2% target and that global factors would not derail the US economy.

The United States Federal Reserve's decision to raise interest rates in December was a “close call”, according to minutes from the Fed's December meeting. Fed members voted unanimously to raise its key interest rate by 25 basis points to between 0.25% and 0.5%. a move widely expected.But some members were cautious, because of global concerns and low inflation.

 Economic conditions will likely justify “only gradual increases'' in the future, the minutes showed.

”Participants emphasized the need to adjust the policy path as economic conditions evolved and to avoid appearing to commit to any specific pace of adjustments,“ according to the details published on Wednesday.

During her statement announcing the increase last month, Fed chairwoman Janet Yellen said she was confident inflation would reach the 2% target and that global factors would not derail the US economy.

Inflation was a key area of concern for several Fed members.

Inflation in the US has remained weaker than expected and the continued fall in oil prices and strengthening of the dollar could derail the Fed's inflation projections.

The members of Fed's board were reasonably confident the jobs market would continue to improve, but that it might not be enough to maintain the economy.

According to the December minuets: ”A couple [of members] also worried that a further strengthening of the labour market might not prove sufficient to offset the downward pressures from global disinflationary forces.”

Categories: Economy, United States.

Top Comments

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  • ChrisR

    They just need to get rid of 'Old Crocodile Tears' from the Whitehouse and it will be alright - or not!

    Who knows? Well not the Fed, that's for sure.

    Jan 07th, 2016 - 07:07 pm 0
  • chronic

    Oops!

    Yellen hit the beaks a little too hard for the Chinese.

    That chino economy is fragile.

    Jan 07th, 2016 - 08:58 pm 0
  • yankeeboy

    China is in deep doo doo

    Massive layoffs at the SOE at eoy.

    An economy built on debt.

    U$3T is not near enough to fix the problem

    I can't wait for the civil unrest to move to the big eastern cities.
    Interesting times ahead.

    Jan 08th, 2016 - 12:29 pm 0
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