The Fed says interest rates are likely to remain at historically low levels - for now

• Federal Reserve policymakers saw fewer risks to the economy at the end of 2019.
• They predicted there would be little to no need to adjust interest rate levels anytime soon.
• But the central bank has also pointed to a bruising trade dispute between the US and China, which has weighed on business investment and manufacturing.
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Federal Reserve policymakers saw fewer risks to the economy at the end of 2019 and predicted there would be little to no need to adjust interest rate levels anytime soon.

The policy-setting Federal Open Market Committee was widely comfortable in December with the current benchmark interest rate range of between 1.5% and 1.75%, minutes released Friday showed. The central bank slashed borrowing costs to that historically low level last year in an attempt to insulate the historic expansion from growing strains, including a slowdown abroad and global trade tensions.

"Maintaining the current stance of monetary policy would give the Committee some time to assess the full effects on the economy of its policy decisions," the minutes from the December 10-11 meeting said. "Participants also discussed how maintaining the current stance of policy for a time could be helpful for cushioning the economy from the global developments."

The FOMC said that downside risks to growth had eased since its last meeting and continued to point to the historically strong job market and healthy consumer spending patterns. But the central bank has also pointed to a bruising trade dispute between the US and China, which has weighed on business investment and manufacturing.

The Trump administration announced in October an interim agreement to defuse those tensions, even though punitive tariffs were kept on thousands of products.

"Important factors influencing this assessment were that international trade tensions and foreign economic developments seemed more likely to move in directions that could have significant negative effects on the US economy than to resolve more favorably than assumed," the minutes said.

Fed Chairman Jay Powell has separately expressed concerns about inflation readings, which have consistently come in below a 2% target. In November, the central bank's preferred gauge of price changes rose 1.6%.

Geopolitical tensions between the US and Iran have risen sharply since December, which could influence the outlook ahead of the next FOMC meeting at the end of the month. An American airstrike killed a central Iranian military figure overnight, rattling financial markets and sending oil prices sharply higher.

"There's always the possibility of a 'heart attack,' or shock, perhaps caused by global risks," Richmond Federal Reserve president Thomas Barkin said in Baltimore early Friday. "Imagine an escalation with Iran or a collapse in international economies."