FOMC Minutes Show Concern over Slowing Global Growth and Increased Trade Policy Uncertainty

The Federal Open Market Committee (FOMC) highlighted growing concern over economic developments that could dampen hiring and consumer spending. Committee members noted that slowing economic growth around the world and heightening trade tensions could hurt the prospects for U.S. economic growth. “Participants generally judged that downside risks to the outlook for economic activity had increased somewhat since their July meeting, particularly those stemming from trade policy uncertainty and conditions abroad,” read the minutes from the September 17-18 meeting. “Several participants mentioned that uncertainties in the business outlook and sustained weak investment could eventually lead to slower hiring, which, in turn, could damp the growth of income and consumption.”

Committee members continued to view the economic outlook as positive, agreeing that the labor market had remained strong and that economic activity had risen at a moderate pace. Most participants’ economic outlook were “premised on a somewhat more accommodative path for policy than in July,” though. However, concern was expressed by some members over models showing a rising risk of recession over the medium term. During the meeting, committee members voted to lower the federal funds rate target range by a quarter percentage point to 1.75 to 2.00 percent. There were three dissents, with two members favoring no change to the target range and another favoring a half percentage point cut. The Committee will next meet October 29-30.

Read the FOMC minutes.