The Fed just said that she had contributed to the crazy stock market rally in December

AP Photo / Mark Lennihan

• December's FOMC communications were seen as contributing to a turbulent month in the financial markets.
• The stocks had their worst December since the Great Depression.
• The market sentiment collapsed after FOMC communications were perceived as not fully appreciating the slowdown in data, the meeting minutes said Wednesday.

Communications from Federal Reserve officials were one of the causes of the moody mood that reigned on Wall Street late 2018, adding to concerns about political and economic tensions, the central bank said in an account of Wednesday's meeting.

"Various factors – FOMC communications, weaker-than-expected data, trade policy uncertainties, partial closure of the federal government, and concerns about business earnings prospects – were cited by market participants as contributing to an early deterioration in feeling of risk in the period, "said the minutes.

As US equities plunged into their worst year since 2008 and trade and growth uncertainties persisted, market watchers were watching the December meeting closely to see if the central bank could curb the rise in US stocks. rate.

While expressing a more tentative approach to monetary policy in 2019 than expected, the Federal Open Market Committee had increased this month its benchmark interest rate by one percentage point to reach a range of target between 2.25% and 2.5%. She cited a labor market and inflation levels close to the target.

"FOMC's December submissions would have been perceived by market players as not fully realizing the implications of tightening financial conditions and easing global data in recent months for the economic outlook." American, "says the report.

At the January FOMC meeting, officials reversed and indicated that the end of this tightening cycle could be imminent.