Reserve Bank’s policy response: analytics In view of the lower level of capital inflows, there were some pressures in the foreign exchange market. Consistent with its policy objective of maintaining orderly conditions in the foreign exchange market, the Reserve Bank sold foreign exchange in the market.
In sum, global conditions present headwinds for the U.S. outlook, and, as my colleagues and I at the Federal Reserve have emphasized, these headwinds have been a prominent consideration in our recent monetary policy assessments. I would now like to elaborate on some of the channels through which foreign developments more generally might be expected to affect the outlook for the U.S. economy.