Downside risks are also present in emerging market economies, where growth has slowed rapidly in recent years.9 Most importantly, China is undergoing a challenging transition from a growth model based on investment, exports, and debt-fueled state-owned enterprises to one driven by consumption, services, and dynamic private businesses.
On the other hand, the practice at the Board may be very well suited to the process of making policy by forcing the FOMC to confront the implications of maintaining an unchanged path for the funds rate.