The Federal Reserve shows little intention to raise short-term interest rates amid the current global economic turmoil, according to recently released minutes of the Fed's March policy meeting. Wall Street Journal staffer Jon Hilsenrath runs an in-depth analysis on the minutes and explains why Fed comes to this decision (subscription required). Hilsenrath writes,
Fed officials expected those headwinds to subside only slowly and didn’t want to appear to be in a rush to push U.S. interest rates higher, according to minutes of the March 15-16 meeting. Fed officials discussed the prospects of an April interest rate increase and several of them argued “that a cautious approach to raising rates would be prudent or noted their concern that raising the target range as soon as April would signal a sense of urgency they did not think appropriate.”
Analysts at Jefferies Group said the minutes showed a penchant to wait for clearer signs that global headwinds won’t derail growth. “Policy makers acknowledge that the financial markets’ volatility and events overseas have increased uncertainty and made it more difficult to assess prospects for the U.S. economy and inflation,” Jefferies economist Ward McCarthy said.