At the central bank’s last policy-setting meeting in January, Fed officials debated the impact that stubbornly low inflation measures were having on the central bank’s confidence in moving ahead with raising rates.
They also noted how China’s economic slowdown and tensions in the Middle East and Ukraine posed downside risks to the US economic growth outlook, according to minutes from the Federal Open Market Committee’s January 27-28 meeting.
Fed officials maintained that a decision on when to raise rates would remain dependent on economic data.
“Many participants observed that a premature increase in rates might damp the apparent solid recovery in real activity and labour market conditions, undermining progress toward the committee’s objectives,” said the minutes.
The Fed repeated in January that it would be “patient” in deciding when to raise benchmark borrowing costs from zero.
The minutes show many participants in the policy meeting feared that dropping “patient” risks shifting market expectations of a rate hike to an “unduly narrow range of dates”.