U.S. News --- THE OUTLOOK: Fed Weighs Trio of Economic Risks as It Meets
Federal Reserve officials will face at least three sources of economic uncertainty when they gather Tuesday and Wednesday: rising U.S. interest rates, unsettling events abroad and another battle in Washington's long-running budget war.</br></br>All three could restrain the U.S. economy in coming months. The Fed can influence only one of them directly.</br></br>The Fed's assessment of the latest threats will shape its decision about scaling back an $85 billion-a-month bond-buying program that has buoyed markets and key parts of the U.S. economy. That makes the central bank's outlook particularly consequential as the four-year-old recovery again fails to meet the Fed's own projections.</br></br>"It's a very difficult decision for them to make," said BNP Paribas economist Julia Coronado. "They've had a forecast for a pickup in growth. It's not materializing."</br></br>For interest rates -- a factor partly within the Fed's control -- the early evidence could spur caution among policy makers.