Federal Reserve last month saw a declining risk of recession

WASHINGTON (AP) — The Federal Reserve’s policymaking committee saw much less risk of recession at its meeting last month, when it kept interest rates steady after three straight cuts and signaled that it expected to keep low rates unchanged through this year.

Minutes of the December meeting, released Friday, showed that Fed officials supported keeping rates in a low range of 1.5% to 1.75% to cushion the U.S. economy from slow global growth and the Trump administration’s trade tensions. Officials were also concerned that inflation still hadn’t reached the Fed’s target level of 2%.

Still, many Fed policymakers said at the Dec. 10-11 meeting that the risks of a U.S.-China trade war had diminished along with the probability of a disruptive Brexit. The meeting occurred two days before the Trump administration and Beijing reached a preliminary trade deal, though press reports had already suggested that an agreement was near.

At their meeting last month, Fed officials noted that the U.S. economy was “showing resilience” despite the trade fights and a weak global economy, the minutes said. A rise in long-term rates also “suggested that the likelihood of a recession occurring over the medium term had fallen noticeably in recent months.”

Since last month’s meeting, though, tensions have escalated in the Middle East as the United States has struck Iranian forces in Iraq. On Friday, stocks sank on Wall Street and oil prices jumped after U.S. forces in Iraq killed a top Iranian general.

Yet many analysts say higher oil prices could potentially benefit the U.S. economy because of the sharp increase in the past decade in U.S. oil production. Higher oil prices encourage energy companies to invest in more drilling wells, which boosts demand for steel pipe and other equipment from U.S. factories, and creates jobs....