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FOMC Meeting Results

Federal Open Market Committee (FOMC) Meeting Results

Dr. Edmond J. Seifried

Dr. Seifried provides excerpts from an official published statement on the Federal Open Market Committee’s meetings.

FOMC Meeting Results, January 2018


Meeting Date:  Jan. 30-31, 2018
 
Economic Highlights
Labor markets seen as improving, economic activity rising, household spending is higher as is business fixed investment, but inflation goal still elusive.
  • Information received since the Federal Open Market Committee met December indicates that the labor market has continued to strengthen and that economic activity has been rising at a solid rate.
  • Gains in employment, household spending and business fixed investment have been solid, and the unemployment rate has stayed low.
  • On a 12-month basis, both overall inflation and core inflation have continued to run below 2 percent.
  • Market-based measures of inflation compensation have increased in recent months but remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.
  • Announcements:  Fed funds rate unchanged! But Committee expects the economy to continue to grow!
  • The Committee decided to maintain the target range for the federal funds rate at 1.25 - 1.50 percent.
  • The Committee declared that the economy is currently balanced.  The risk of higher unemployment or higher inflation is roughly equal, but the Committee continues to monitor inflation developments closely. This is an indication that the Committee views that there is a chance that the economy may overheat.
  • The FOMC said the stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation.
  • The Committee expects that, with further gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will remain strong.
 
Forward Guidance
Fed warns, again, to expect gradual rate hikes and that the path of future rates will remain below the level normally expected in the longer run.
  • 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 objectives of maximum employment and 2 percent inflation.
  • 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.
  • The Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal.
  • The Committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.
 
Voting Results
No dissenting vote at this meeting.
Voting for the FOMC monetary policy action were Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Thomas I. Barkin; Raphael W. Bostic; Lael Brainard; Loretta J. Mester; Jerome H. Powell; Randal K. Quarles; and John C. Williams.
 
Next Meeting:  March 20-21, 2018
 
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The preceding information contains excerpts from an official published statement on the Federal Open Market Committee’s Jan. 30-31, 2018 meeting.  For full text, please visit the Federal Reserve website.

Dr. Ed Seifried is Chief Economist and Strategic Advisor at BNK Advisory Group. He is also professor of economics and business at Lafayette College in Easton, PA, and a faculty member of numerous graduate banking schools, including Stonier Graduate School of Banking and the Graduate School of Retail Bank Management. He also serves as dean of The West Virginia and Virginia Banking Management Schools. Dr. Seifried is a nationally recognized speaker and is the author of both academic and popular articles and books. He is the co-author of BNK's Art of Strategic Planning in Community Banks and The Art of Risk in Community Banks, a series for the committed bank director. He holds his doctorate in economics and business from West Virginia University.
 
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