Fed concerned about global growth prospects

The U.S. Federal Reserve policymakers were concerned over global growth prospects, according to the minutes of the Fed's monetary policy meeting on Oct. 28 and 29 released Wednesday.

The minutes said the Fed staff revised down its projection for the U.S. real GDP growth a litter over the medium term, in response to a further rise in the foreign exchange value of the dollar, deterioration in global growth prospects, and decline in equity prices.

"Participants pointed to a somewhat weaker economic outlook and increased downside risks in Europe, China, and Japan, as well as to the strengthening of the dollar," the minutes said.

But supported by the accommodative monetary policy and further easing of restraint on spending from changes in fiscal policy, the Fed expected the GDP to rise faster than potential output in 2015 and 2016.

Further declines in crude oil prices also led the Fed to cut its forecast for inflation this quarter and early next year. But many policy meeting participants believed that the energy price declines would provide a boost to consumer spending over the near term and thus support the economy.

The minutes showed that there was a debate over the language on the pace of interest rate hikes after halting monthly bond purchases. Some participants wanted to remove "considerable time" in the statement while others did not.

The Fed decided to keep the wording because some policymakers worried that its removal could be seen as signaling a significant shift in the stance of policy. The Fed has been saying since last year that rates would stay near zero for a "considerable time" after the bond purchase program ended.