Factbox: Fed's rate decision follows a roller-coaster year

(Reuters) - A volatile few weeks in financial markets could be the latest reason for the U.S. Federal Reserve to delay an interest rate hike when Fed policymakers hold a policy meeting on Wednesday and Thursday. Here is a timeline of the economic ups and downs over the last year:

* In September last year the U.S. economy was roaring along in its second straight quarter of more than 4-percent gross domestic product (GDP) growth with the Fed well on course to shelve a bond-buying program known as quantitative easing, or QE3, the following month and look ahead to an initial rate hike.

* In October, global oil prices tumbled and led to sharp selling on Wall Street, sowing worries that too-low U.S. inflation would not rebound toward the Fed's 2-percent target any time soon. St. Louis Fed President James Bullard even suggested keeping QE3 running longer than expected - an idea that boosted stocks but was ultimately rejected.

* As the year wound down, Fed officials increasingly flagged "mid-2015" as a reasonable time to consider raising rates. They also adopted a mantra first floated by more hawkish policymakers, as well as centrist John Williams of the San Francisco Fed, that a "gradual" tightening cycle was most likely, leading investors to zero in on a Fed meeting in June as the probable time for a hike.

* An unusually cold winter, combined with an extended dollar rally and more weakness in commodity prices, slowed the economy sharply in the first quarter of 2015, with one government estimate showing it contracted at a 0.7 percent pace. That was later revised to show 0.6 percent growth but the slowdown prompted Fed officials to start backing away from the mid-2015 timeframe.

* In February, at a conference of central bankers, New York Fed President William Dudley endorsed the findings of a research paper by economists Jan Hatzius of Goldman Sachs and Ethan Harris of Bank of America Merrill Lynch that argued the Fed would be wise to keep rates at rock bottom for longer than planned and then tighten more aggressively. Dudley also gave a series of speeches arguing that an earlier hike is riskier than a later one, and stressing that the pace of tightening would depend in part on how financial markets reacted.

* As the dollar kept rising and oil prices fell, keeping U.S. inflation below target, predictions for rates liftoff slipped from a Fed policy meeting in June to the one in September. Yet as recently as July, Fed Chair Janet Yellen appeared to back the "gradual" approach when she told a congressional hearing that waiting longer means "we might have to (hike) more rapidly," whereas "an advantage to beginning a little bit earlier is that we might have a more gradual path."

* In August, surprisingly weak Chinese economic data and flailing efforts by authorities there to halt a stock selloff prompted worries over a global economic slowdown that rattled financial markets. That sparked another round of second-guessing among Fed officials who, until then, were generally expected to raise rates at the meeting this week. Policymakers' comments, polls of economists, and trading in futures markets suggest a delay to later this year is slightly more likely.

(Reporting by Jonathan Spicer; Editing by Andrew Hay)

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