Fed Ready to Pause on Interest Rate Increases

The Fed at its December meeting raised its benchmark rate into a range between 2.25 in addition to 2.5 percent. the item was the fifth consecutive quarterly increase. Mr. Powell said the rate currently stood near the lower end of the range that will the Fed regards as neutral territory — the range in which the central bank will be neither encouraging nor discouraging borrowing in addition to economic growth.

At a news conference after the December meeting, Mr. Powell emphasized that will economic growth remained strong, in addition to that will the Fed likely to continue raising rates in 2019. Investors registered their disapproval by driving down asset prices, exacerbating a market slump.

Since then, Mr. Powell in addition to additional Fed officials have sought to deliver a more nuanced message, emphasizing that will they are paying attention to the concerns of investors, in addition to that will the absence of inflationary pressure means the Fed can afford to postpone judgment.

The account of the December meeting doubled down on that will message.

The Fed, according to its minutes, said that will “participants expressed that will recent developments, including the volatility in financial markets in addition to the increased concerns about global growth, made the appropriate extent in addition to timing of future policy firming less clear than earlier.”

The Fed’s own economic outlook remains upbeat. The minutes described economic data inside final months of 2018 as even stronger than the Fed had expected. Mr. Rosengren said consumers remain “willing to spend,” in addition to that will he expected unemployment might continue to fall.

Mr. Evans said he was continuing to forecast “another not bad year in 2019.”

although uncertainties have piled up in recent months. The minutes said investors were particularly concerned about trade tensions between the United States in addition to China, in addition to about global growth. The minutes did not mention that will investors also fear that will the Fed will make a mistake by raising interest rates too quickly.

The recent downturn in financial markets will be both a symptom of these worries in addition to a potential problem in its own right. Declines in invested wealth, or reductions in lending, can infect the broader economy.

The message coming from Fed officials will be that will the Fed will wait to see who will be correct.

“If the pessimism evident in financial markets eventually shows through to economic outcomes, there might be less need (in addition to perhaps no need) for further increases in interest rates,” Mr. Rosengren said. “However, my current expectation will be that will the more optimistic view will prevail.”