While general trade uncertainty remained somewhat elevated, participants in the Federal Open Market Committee’s January meeting cited easing trade tensions, receding risks from Brexit and stabilizing global growth as reasons for maintaining the federal funds rate in a target range of 1.5-1.75%, according the FOMC meeting minutes released Feb. 19.
“The easing of trade tensions resulting from the recent agreement with China and the passage of the USMCA as well as tentative signs of stabilization in global economic growth helped reduce downside risks and appeared to buoy business sentiment,” the minutes state.
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. Participants were nonetheless mindful of the possibility that the tentative signs of stabilization in global growth could fade, and they cited risks posed by the outbreak of the coronavirus. Read the FOMC minutes.