Federal Reserve policy makers said a slowdown in the world economy could undermine the U.S. expansion and prompt them to delay raising interest rates.

“If foreign growth is weaker than anticipated, the consequences for the U.S. economy could lead the Fed to remove accommodation more slowly than otherwise,” Vice Chairman Stanley Fischer said in a weekend speech at the International Monetary Fund’s annual meetings in Washington.

The remarks, echoed by other Fed officials, highlighted mounting concern about the improving U.S. economy’s ability to withstand foreign weakness and a strengthening dollar. Similar worries last week prompted investors to tip the Standard & Poor’s 500 Index to its weakest level since May and push oil prices into a bear market.

“I’m worried about growth around the world right now,” Fed Governor Daniel Tarullo told a banking conference on the sidelines of the IMF talks. “This is obviously a set of things that we have to think about in our own policies going forward.”

The comments came the same week that minutes of the Fed’s September policy meeting showed authorities highlighting worries over the risks posed to their economy by deteriorating expansions abroad and a stronger dollar, which could hurt exports and damp inflation.

The IMF last week reduced its forecasts for global growth in 2015, predicting it will be 3.8 percent, compared with a July forecast for 4 percent, after a 3.3 percent expansion this year.

Japan, Europe

San Francisco Fed President John Williams said that with the Bank of Japan and European Central Bank also pursuing unconventional monetary policies, there is a risk of tensions between them.

“It’s a global financial system, and there’s a lot of uncertainty out there,” Williams said at the Institute of International Finance’s conference in Washington. “It’s the cross-currents that really drive, in my mind, the uncertainty and some of that risk out there in global markets.”

Williams, who will vote on the policy-setting Federal Open Market Committee next year, said “it’s not just what the Fed is doing. It’s the fact that central banks are moving in different directions for entirely appropriate reasons.”

With the Bloomberg Dollar Spot Index climbing almost 7 percent since the start of July, U.S. Treasury Secretary Jacob J. Lew used the IMF meetings to remind his international counterparts to “avoid persistent exchange-rate misalignments, refrain from competitive devaluation, and not target exchange rates for competitive purposes.”

Benchmark Rate

Most Fed officials expect to raise the benchmark interest rate some time next year, according to projections released on Sept. 17 following their last meeting. Traders see about a 33 percent chance the Fed will raise the rate by its July 2015 meeting, down from a 59 percent on Sept. 18, fed funds futures data compiled by Bloomberg show.

Fischer said the Fed won’t raise rates until the U.S. expansion “has advanced far enough,” and emerging markets should be able to weather the increase.

“Tightening should occur only against the backdrop of a strengthening U.S. economy and in an environment of improved household and business confidence,” he said.

Chicago Fed President Charles Evans said his own preference is to hold back on raising rates “until we have an awful lot of confidence that things are taking off.”

“We’re at a point where we need to get inflation up,” he said. The Fed’s preferred measure of prices, the personal consumption expenditures index, rose 1.5 percent in the year to August and hasn’t exceeded the Fed’s 2 percent target since March 2012.

Bloomberg