Core Strategic Partners: The turmoil that has gripped global financial markets in recent weeks gave voting members of the FOMC (Federal Open Markets Committee) pause for concern as they deliberated over the timing of future interest rate rises in 2016 at their last meeting.

According to the minutes of the meeting, divisions between officials on how to interpret the volatility that has characterized equity markets around the world in the wake of the central bank’s December rate hike. Fed Chair, Janet Yellen recently indicated that the central bank could postpone plans for tighter monetary policy in order to gauge the economy’s response to the current headwinds.

“The message from the minutes appeared to be ‘Downside risks to the US economy have increased, exercise caution’” said Will Masson, chief markets strategist at Core Strategic Partners.

Fears are mounting that the US economy will flirt with recession in 2016 although a few data points have recently pointed to a slight gain in momentum for consumer spending and industrial production.

“Core Strategic Partners are still convinced that the Fed will be unable to raise interest rates again this year and that ultimately, it will be forced to resume stimulus in some form or another,” said Masson.

Policy makers observed that further declines in oil prices and further appreciation of the US dollar indicated that their 2% target for inflation would take longer to achieve. Some of the officials noted that clear confirmation of inflation rising toward the 2% target would represent a key deciding factor vis a vis their assessment of the path for monetary policy.

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