The Federal Open Market Committee (FOMC) decided to maintain the current target for the federal funds rate at 25-50 basis points, as the stance of monetary policy remains accommodative.
The post meeting statement noted that economic activity “appears to have slowed” during the intermeeting period, even as labor market conditions improved further. Inflation has continued to run below the Committee’s 2 percent long-run objective, partly reflecting lower energy prices and prices of non-energy imports. The Committee expects inflation to rise to 2 percent over the medium term.
Language from the previous meeting’s statement, which said that “global and financial developments continue to pose risks,” was omitted. The Committee instead asserted that it will closely monitor global economic and financial developments.
Against this backdrop, all but one member voted to maintain accommodative policy at this meeting. Kansas City Federal Reserve President Esther George voted against this action, believing that a 25 basis point increase was warranted.
Read the FOMC statement.
Visit Banks and the Economy.