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October 08, 2015
FOMC's September minutes focus on uncertainty abroad
The minutes from the Federal Open Market Committee's Sept. 16-17 meeting indicate a focus on events abroad and their potential impact on U.S. net exports, gross domestic product and inflation.
Release Thursday, the minutes also indicate that most FOMC members still anticipate an increase in the federal funds target rate by the end of the year.
"The minutes from the FOMC's September meeting frames the decision to hold off on increasing rates as one driven by global weakness rather than on the subsequent reaction of financial markets," said NAFCU Chief Economist and Director of Research Curt Long. "The committee reiterated that it intends to raise rates this year, but low inflation and the continued downward pressure from currency values, oil prices and weakness abroad represent significant obstacles."
After the September meeting, the committee announced it would not raise rates or make any policy changes. By a 9-1 vote, the committee determined that recent weakness abroad threatened to weaken growth domestically and may increase the downward pressure on inflation.
According to the minutes, committee members also tried to downplay the volatility in the stock market: "Many participants judged that the effects of these developments on domestic economic activity were likely to be small, but they acknowledged the risk that they might restrain U.S. economic growth somewhat."
The Federal Reserve has kept the federal funds rate target at a range of 0 to 0.25 percent since December 2008.
Release Thursday, the minutes also indicate that most FOMC members still anticipate an increase in the federal funds target rate by the end of the year.
"The minutes from the FOMC's September meeting frames the decision to hold off on increasing rates as one driven by global weakness rather than on the subsequent reaction of financial markets," said NAFCU Chief Economist and Director of Research Curt Long. "The committee reiterated that it intends to raise rates this year, but low inflation and the continued downward pressure from currency values, oil prices and weakness abroad represent significant obstacles."
After the September meeting, the committee announced it would not raise rates or make any policy changes. By a 9-1 vote, the committee determined that recent weakness abroad threatened to weaken growth domestically and may increase the downward pressure on inflation.
According to the minutes, committee members also tried to downplay the volatility in the stock market: "Many participants judged that the effects of these developments on domestic economic activity were likely to be small, but they acknowledged the risk that they might restrain U.S. economic growth somewhat."
The Federal Reserve has kept the federal funds rate target at a range of 0 to 0.25 percent since December 2008.
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