Fed awaiting evidence global chill not knocking U.S. off track: minutes

WASHINGTON (Reuters) - The U.S. Federal Reserve thought the economy was close to warranting an interest rate hike in September but policymakers decided it was prudent to wait for evidence a global economic slowdown was not knocking America off course.

The minutes from the Sept. 16-17 meeting released on Thursday showed the Fed's policymaking committee was unsettled by signs of a global economic slowdown but didn't think this had "materially altered" the outlook for the economy.

"Nevertheless, in part because of the risks to the outlook for economic activity and inflation, the committee decided that it was prudent to wait for additional information," the Fed said in the minutes.

The Fed surprised much of Wall Street by keeping interest rates unchanged at the September meeting.

Some policymakers have since said the decision was a close call, and the minutes showed that most of them still thought it would be appropriate to raise rates "by the end of the year."

But in discussing how close the economy was to reaching the Fed's goals of maximum employment and 2 percent inflation, "many acknowledged that recent global economic and financial developments may have increased the downside risks to economic activity somewhat."

(Reporting by Jason Lange and Howard Schneider; Editing by Andrea Ricci)