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Roundup: Fed officials see rates liftoff in sight this year

Xinhua, October 9, 2015 Adjust font size:

Policy makers at the Federal Reserves believed the economic outlook warranted a rate hike this year, but global turmoil and low inflation required more prudence in allowing the liftoff.

Participants of the Fed's latest monetary policy meeting said growth in real economic activity over the first half of the year was stronger than expected, and the unemployment rate declined somewhat more than anticipated, according to the minutes of the meeting released on Thursday.

"Most continued to see the risks to real activity and unemployment as nearly balanced, but many acknowledged that recent global economic and financial developments may have increased the downside risks to economic activity somewhat," it noted.

The Fed postponed its decision to raise the interest rate in September considering the turbulent global economic and financial market development posed downside risks to the U.S. economic outlook.

The minutes said the recent global economic and financial developments had imparted some restraint to the economic outlook and placed further downward pressure on inflation in the near term.

The document also revealed that the developments "had not materially altered" the Fed officials' economic outlook. Many expected the conditions that warrant the rate liftoff to be met later this year.

Nevertheless, in part because of the risks to the outlook for economic activity and inflation, the Fed decided that it was prudent to wait for additional information confirming that the economic outlook had not deteriorated and inflation would become more likely to move up toward two percent goal.

San Francisco Fed President John Williams said on Thursday that he viewed the next appropriated step as gradually raising rates most likely starting sometime later this year.

He added that view was not immutable and would respond to economic developments over time.

The Fed was widely believed to hike the rates in June, but that was disrupted by a languished economic performance in the first quarter due to the bitterly cold weather.

The U.S. economy warmed up lately with the Gross Domestic Product (GDP) moving up to an annual growth rate of 3.9 percent in the second quarter, and the jobless rate falling close to the full employment level. Endi