FOMC STATEMENT: Rates unchanged at 3.50-3.75%, as expected; voted 8-4 to hold rates (Miran voted for a 25bps rate reduction; Hammack, Kashkari, Logan dissented on easing bias in statement)
Importance
Level 1
RATE DECISION
- Fed holds target range for federal funds rate at 3.50-3.75%
- Eight voted to hold rates unchanged; one (Miran) voted to cut by 25bps; three (Hammack, Kashkari, Logan) voted to hold but opposed inclusion of easing bias in statement
DISSENT DETAILS
- Miran preferred to lower target range by 25bps at this meeting
- Hammack, Kashkari, Logan supported holding rates but did not support inclusion of an easing bias in the statement at this time
FORWARD GUIDANCE
- Fed says in considering extent and timing of additional adjustments, Committee will carefully assess incoming data, the evolving outlook, and the balance of risks
- Committee would be prepared to adjust stance of monetary policy if risks emerge that could impede attainment of its goals
- Assessments will take into account labour market conditions, inflation pressures and inflation expectations, and financial and international developments
LABOUR MARKET
- Fed notes job gains have remained low on average; unemployment rate little changed in recent months
- Committee seeks to achieve maximum employment
INFLATION
- Fed says inflation is elevated, in part reflecting recent increase in global energy prices
- Committee strongly committed to returning inflation to 2% objective
BALANCE OF RISKS
- Fed notes Middle East developments are contributing to a high level of uncertainty about the economic outlook
- Committee says it is attentive to risks to both sides of its dual mandate