Members of the Federal Open Market Committee said the risks and uncertainties surrounding the economic outlook "had increased significantly," according to minutes released Wednesday from its June 18-19 meeting.
Many participants noted that since the committee's previous meeting, the economy appeared to have lost some momentum and pointed to recent weak indicators for business confidence, trade developments and signs of slowing global economic growth, the minutes showed.
Federal Reserve Chairman Jerome Powell made similar comments Wednesday in testimony before the House Financial Services Committee.
Members indicated that "international trade tensions and foreign economic developments seemed more likely to move in directions that could have significant negative effects on the U.S. economy than to resolve more favorably than assumed," the minutes said.
The committee held the target range for the federal funds rate at 2.25% to 2.5%, but amended its future outlook at the June meeting. In March, FOMC members reduced the number of projected rate hikes in 2019 to zero from two and projected, on average, that the federal funds rate will stay at 2.4% by the end of 2019 and rise to 2.6% by the end of 2020. Now, they project, on average, the funds rate will fall to 2.1% by the end of 2020.
Nine members voted to keep the rate unchanged at last month's meeting while St. Louis Fed President James Bullard voted to cut the funds rate by a quarter point.
Although a rate cut is expected at the committees next meeting, in June, some participants suggested there was not yet a strong case for a rate cut from current levels. "They preferred to gather more information on the trajectory of the economy before concluding that a change in policy stance is warranted," the minutes said.
Members reiterated that their economic assessments would take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.
"More generally, members noted that decisions regarding near-term adjustments of the stance of monetary policy would appropriately remain dependent on implications of incoming information for the economic outlook," the minutes said.
Cliff Corso, New York-based executive chairman at Insight Investment, said the minutes indicate a likely July rate cut. He noted the Fed's seemingly dovish turn recently, which is a departure from 2018 when it raised rates four separate times.
"There's a debate: is the Fed leading the market or is the market leading the Fed?" Mr. Corso said. "And it seems like the Fed is definitely paying attention to the market at this point."
The committee's next meeting is July 30-31.