WASHINGTON – American central bankers have grown more fearful, saying a global slowdown and President Donald Trump’s trade wars could drag down hiring and the broader economy with it, meeting minutes showed Wednesday.
While the outlook remains good for the moment – with strong jobs markets, historically low unemployment and the general public continuing to loosen purse strings – weaker recent economic data have put clouds on the horizon, the minutes from the Federal Reserve’s Sept. 17-18 meeting showed.
“Participants generally had become more concerned about risks associated with trade tensions and adverse developments in the geopolitical and global economic spheres,” according to the minutes.
Several noted that models gauging recession probabilities had “increased notably in recent months.”
At the September meeting, a majority of Fed policymakers voted to cut interest rates and markets expect them to do so again later this month, acting to cushion the world’s largest economy as exports weaken, industrial costs rise, foreign demand sinks and growth trends downward.
But members of the central bank are grappling with a complex economic picture, the minutes showed, as ominous developments creep into what has otherwise been a sunny vista of steady expansion and job creation.
While some policymakers have grown more anxious, a minority oppose rate cuts, saying the economy’s current health does not justify them.
Economic forecasters expect third quarter GDP growth will prove the slowest of the year so far but remain solid, a view shared by members of the Fed’s interest-rate-setting Federal Open Market Committee, according to the minutes. (AFP)
