FOMC minutes

[myname]

FOMC Minutes: Almost all Fed officials saw payrolls raising uncertainty

Highlights of the Minutes from the June 14-15 Federal Reserve meeting

• Officials generally agreed it was prudent to wait for additional data on jobs and the impact of the Brexit vote
• Most noted Brexit vote could generate financial market turbulence that could hamper economy
• Some noted continued uncertainty regarding outlook for China's policy
• High debt levels in China and other emerging markets represented risks to financial system
• Here was the full text of the June 15 FOMC statement

[thenews]

Uncertainty on Rise Inside Fed: FOMC Minutes

Most Federal Reserve (Fed) policymakers still wanted to see more data before deciding on another interest rate hike, the minutes from the latest Federal Open Market Committee (FOMC) meeting showed on Wednesday.

The document showed that a catastrophic May non-farm payrolls report shook the Fed as US employers added only 38,000 new positions, after averaging almost 220,000 jobs over the preceding year.

While some Fed officials said that lower payrolls may signal a broader slowdown, others were more optimistic and said that the report understated the pace of job creation.

The meeting minutes also showed that some FOMC members were less confident on inflation returning to the 2% goal, while others argued against delaying the rate liftoff for too long.

Amid these divisions, Fed officials agreed that it was "prudent to wait" for additional economic data before deciding how to proceed.

Yet, in general, the document mentioned the word "uncertainty" 32 times, compared to just three times in April, offering a dovish picture overall.

The policymakers "judged it appropriate to continue to leave their policy options open and maintain the flexibility to adjust the stance of policy based on how incoming information affected the committee’s assessment of the outlook for economic activity, the labor market and inflation as well as the risks to the outlook."

Markets carefully digested the document, even if the UK's surprising vote to leave the European Union - which happened before the June 14-15 meeting - swept away the prospects for a Fed interest rate hike any time soon.

At the get-together, the central bank left interest rates intact, as expected. Yet, several Fed officials lowered their expectations for the number of times they would increase rates this year, though the median projection held at two.

The US Labor Department is set to publish its June report on Friday.

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