The outlook abroad appears to have become more uncertain of late. And height end concerns about growth in -- heightened concerns about growth in China and other emerging market economies have led to volatility in financial markets.
Development since our July meeting including the drop in equity prices, the further appreciation of the dollar, and a widening in risk spreads have tightened overall financial conditions to some extent.
These developments may restrain U.S. economic activities somewhat and are likely to put further downward pressure on inflation in the near term. Given the significant economic and financial interconnections between the United States and the rest of the world, the situation abroad bears close watching.
