NEWYORK (Reuters) – Italy’s political woes pose a threat to synchronised global economic growth and stand out among risks for the Federal Reserve as it continues to gradually raise U.S. interest rates in the face of fiscal stimulus at home, one of the most influential Fed policymakers said on Thursday.
“Global growth has been synchronised over the past year, but recent developments pose some risk. Political developments in Italy have reintroduced some risk, and financial conditions in the euro area have worsened somewhat in response,” Fed Governor Lael Brainard said in prepared remarks.
“I continue to view gradual increases in the federal funds rate as the appropriate path, although I will remain vigilant for the emergence of risks and prepared to adjust if conditions change,” she added.
(Reporting by Jonathan Spicer; Editing by Chizu Nomiyama)