TheChek News Flow

* Some of them believed that a convergence to a more moderate, sustainable pace of job gains would soon be necessary to prevent an unwanted increase in inflationary pressures. Other participants continued to judge that labor utilization remained below that consistent with the Committee's maximum-employment objective.

* Nevertheless, a few participants continued to caution about the risks to the inflation outlook from overshooting the natural rate of unemployment.

* Regarding the outlook for inflation, incoming information appeared to be broadly in line with most participants' earlier expectations that inflation would gradually rise to 2 percent over the medium term.

* In its latest report on potential risks to the stability of the U.S. financial system, the staff continued to judge that vulnerabilities overall remained at a moderate level and noted that the financial system had been resilient to the Brexit vote.

* Regarding the near-term outlook, participants generally agreed that the prompt recovery in financial markets following the Brexit vote and the pickup in job gains in June had alleviated two key uncertainties about the outlook that they had faced at the June meeting.

* Participants judged that the incoming information, on the whole, had lowered the downside risks to the near-term economic outlook. Most participants anticipated that economic growth would move up to a rate somewhat above its longer-run trend during the second half of 2016 and that the labor market would strengthen further. However, several noted that while the outlook for consumer spending remained positive, continued weakness in business investment and the possibility of slower improvement in the housing sector posed some downside risks to their forecasts.

* In addition to the situation in Europe, some participants continued to see a number of other downside risks to the medium-term economic and financial outlook from abroad, including weakness in the global economy more broadly, uncertainty about the outlook for China's foreign exchange policy, and the implications of China's run-up in debt to support its economy. A few others noted uncertainty about the strength of domestic economic activity going forward. However, some other participants indicated that they did not view the uncertainties attending the outlook to be unusually elevated and continued to see the risks to their economic forecasts as balanced.

* In addition, although near-term downside risks to the outlook had diminished over the intermeeting period, some participants stressed that the Committee needed to consider the constraints on the conduct of monetary policy associated with proximity to the effective lower bound on short-term interest rates. These participants concluded that the Committee should wait to take another step in removing accommodation until the data on economic activity provided a greater level of confidence that economic growth was strong enough to withstand a possible downward shock to demand.