Meeting Date: Sept. 17-18, 2019
FOMC declares the economy has changed little since their last meeting of July 2019. While labor markets remain healthy, household spending has increased, but business fixed investment and exports remain weak compared to earlier this year.
- “Information received since the Federal Open Market Committee met in July indicates that the labor market remains strong and that economic activity has been rising at a moderate rate.
- Job gains have been solid, on average, in recent months, and the unemployment rate has remained low.
- Although household spending has been rising at a strong pace, business fixed investment and exports have weakened.
- On a 12-month basis, overall inflation and inflation for items other than food and energy are running below 2%.
- Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed.”
Fed funds rate lowered by 0.25%. New fed funds range is 1.75%-2.00%. The Fed remains determined to keep the expansion moving forward. But Fed admits the future has become more uncertain.
- “Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee decided to lower the target range for the federal funds rate to 1.75% to 2.00%.
- This action supports the Committee's view that sustained expansion of economic activity, strong labor market conditions and inflation near the Committee's symmetric 2% objective are the most likely outcomes, but uncertainties about this outlook remain.
- As the Committee contemplates the future path of the target range for the federal funds rate, it will continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2% objective.”
The Fed indicated that future rate hikes will depend on economic conditions such as labor market changes, indicators of inflation pressures and any changes in inflation expectations and international developments.
- “In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2% inflation objective.
- This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.”
Three dissenting votes: one member wanted to lower rates by 0.5%, and two members wanted no rate cut at all.
Voting for the monetary policy action were Jerome H. Powell, Chair, John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Charles L. Evans; and Randal K. Quarles.
Voting against the action was James Bullard, who preferred at this meeting to lower the target range for the federal funds rate to 1.50% to 1.75%.
Also voting against the measure were Esther L. George and Eric S. Rosengren, who preferred to maintain the target range at 2% to 2.25%.
Next Meeting: Oct. 29-30, 2019
The preceding information contains excerpts from an official published statement on the Federal Open Market Committee’s Sept. 17-18, 2019 meeting. For full text, please visit the Federal Reserve website.