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Our baseline outlook is for economic growth to remain solid, labour markets to stay strong, and inflation to move back up, over time, to the committee's 2 per cent objective. However, uncertainties about the outlook have increased in recent months. In particular, economic momentum appears to have slowed in some major foreign economies. And that weakness could affect the US economy.
Moreover, a number of government policy issues have yet to be resolved, including trade developments, the federal debt ceiling, and Brexit. And there is a risk that weak inflation will be even more persistent than we currently anticipate. Since our May meeting, however, these crosscurrents have re-emerged, creating greater uncertainty.
Apparent progress on trade turned to greater uncertainty. And our contacts in business and agriculture report heightened concerns over trade developments. Growth indicators from around the world have disappointed on net, raising concerns that weakness in the global economy will continue to affect the US economy.