Fed minutes show uncertainties about job slowdown and Brexit

Some analysts think that the Fed could hold off raising rates until September or possibly even wait until its last meeting of the year in December.

Putting the jobs report and Brexit aside, most members considered hiking rates on only three conditions: “One, the economic information confirmed economic growth picked up”.

New York Fed President William Dudley takes part in a panel convened to speak about the health of the U.S. economy.

Few analysts, though, think a healthy jobs report Friday would be enough to speed up the Fed’s timetable for a rate hike in light of the British vote to leave the European Union and other concerns about the global economy.

Since the start of the year, two top Fed officials have been on the opposite sides of the too-big-to-fail issue.

However, a couple of officials said they wanted to accumulate “sufficient evidence” of a sustained pickup in inflation and that the economy is strong enough to withstand another rate increase.

But the FOMC held off, as others at the meeting saw the economy subject to significant downside risks.

They also disagreed on the outlook for jobs and growth.

But other participants were “less confident” about that inflation path. Several also suggested that, because rates are still close to zero, the Fed has less room to respond to a rapid increase in inflation than to the economy weakening.

Tarullo, who as a governor has a vote at every Fed policy meeting, said the cautious approach was particularly warranted as the world digests the impact of Britain’s vote to leave the European Union.

“It is a decision that could have consequences for economic and financial conditions in global financial markets”, Ms. Yellen said.

USA credit demand is relatively week but Tarullo said it would be wrong to blame that on rules that require banks to hold more capital against losses.

The dollar, which has gained more than two percent against a basket of currencies since the Brexit vote and could weigh on US exporters, weakened slightly following publication of the minutes.

Federal Reserve Governor Daniel Tarullo on Wednesday said there is no need to raise US interest rates until there is convincing evidence inflation is moving towards the Fed’s target on a sustained basis. “It will be something that attenuates over time”, he said.

Nearly all participants at the policy meeting said that the shockingly weak May labor report – with only 38,000 jobs added – had increased the uncertainty of the United States economic outlook, the minutes said. “And probably the other things that are going on are more important for the US outlook … than Brexit all by itself”.