Federal Reserve policy-makers discussed a variety of economic threats at their October meeting — from turbulent financial markets to overseas weakness — but decided to move forward with plans to end their landmark bond buying program.
Minutes of the Fed’s Oct. 28-29 meeting released Wednesday showed that Fed officials grappled with a number of developments, from sharp moves in U.S. stock prices to increased signs of weakness in such key regions as Europe and Asia. They also expressed concern that inflation, which has been running below the Fed’s target of 2 percent, could drift lower because of falling energy prices and a strengthening U.S. dollar.
Fed officials noted that economic growth might be slower over the medium term than currently expected if foreign economic conditions or financial markets deteriorated significantly, the minutes said.
But the officials also expressed confidence that the U.S. economy was on solid footing and expected to keep improving.
The minutes cited the “somewhat weaker economic outlook and increased downsides risks in Europe, China and Japan.” But it said that Fed officials believed the impact would likely be “quite limited” on the U.S. economy, in part because they expected that the slowdown in overseas demand would likely be less severe than initially feared.
