The Federal Reserve issued a statement today following its latest Federal Open Market Committee meeting. The statement highlighted ongoing economic developments and policy adjustments. Recent indicators suggest that economic activity has continued to expand at a solid pace.
The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain strong. However, inflation remains somewhat elevated, and uncertainty around the economic outlook has increased. The Federal Reserve seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run.
In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent. The Committee will carefully assess incoming data, the evolving outlook, and the balance of risks in considering any future adjustments to the target range. The Fed will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities.
Starting in April, the Committee will slow the pace of decline in its securities holdings by reducing the monthly redemption cap on Treasury securities from $25 billion to $5 billion. The monthly redemption cap on agency debt and agency mortgage-backed securities will remain at $35 billion. Chair Jerome H.
Powell and other members of the FOMC reaffirmed their strong commitment to supporting maximum employment and returning inflation to its 2 percent objective. The Committee will monitor the implications of incoming information on the economic outlook and will be prepared to adjust monetary policy as necessary to achieve its goals.
Fed maintains steady interest rates
The Committee’s assessments will consider a wide range of information, including labor market conditions, inflation pressures and expectations, and financial and international developments. Voting for the monetary policy action were Jerome H. Powell, Chair; John C.
Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Susan M.
Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N.
Jefferson; Adriana D. Kugler; Alberto G. Musalem; and Jeffrey R. Schmid.
Christopher J. Waller voted against the action, supporting no change in the federal funds target range but preferring to maintain the current pace of securities holdings decline.
Image Credits: Photo by Jakub Żerdzicki on Unsplash
