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  • Oct 9th, 2015
  • Comments Off on Fed delayed rate hike on China, inflation worries
The Federal Reserve postponed an interest rate hike last month as it worried about a global slowdown led by China, the strong dollar and listless US inflation, a Fed report showed Thursday. Policymakers at the September 16-17 meeting of the Federal Open Market Committee, mulling an increase in the zero-level federal funds rate, took a cautious approach after a severe bout of financial turmoil unsettled the outlook for the US economy.

"Recent global and financial market developments might restrain economic activity somewhat as a result of the higher level of the dollar and possible effects of slower economic growth in China and in a number of emerging market and commodity producing economies," the minutes said. Still, "most participants continued to anticipate that, based on their assessment of current economic conditions and their outlook for economic activity, the labor market, and inflation, the conditions for policy firming had been met or would likely be met by the end of the year," the minutes said.

With one dissent, the FOMC voted to leave the benchmark interest rate between zero and 0.25 percent, where it has been since December 2008 to support the economy through the worst recession since the 1930s and its recovery. Although the US economy was considered to be growing moderately and the labor market was nearing full employment, with unemployment at 5.1 percent, some Fed policymakers appeared less optimistic that inflation would move toward the longer-term 2.0 percent target.

Copyright Agence France-Presse, 2015


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