I've highlighted spots to look for changes in the statement to be released today. Reminder, there are no forecasts or projections today, just a statement.
Information received since the Federal Open Market Committee met in November indicates that the labor market has continued to strengthen and that economic activity has been expanding at a moderate pace since mid-year.
Job gains have been solid in recent months and the unemployment rate
has declined. Household spending has been rising moderately but business fixed investment has remained soft.
Inflation has increased since earlier this year but is still below the
Committee's 2 percent longer-run objective, partly reflecting earlier
declines in energy prices and in prices of non-energy imports.
Market-based measures of inflation compensation have moved up
considerably but still are low; most survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months. Consistent
with its statutory mandate, the Committee seeks to foster maximum
employment and price stability. The Committee expects that, with gradual
adjustments in the stance of monetary policy, economic activity will
expand at a moderate pace and labor market conditions will strengthen
somewhat further. Inflation is expected to rise to 2 percent over the
medium term as the transitory effects of past declines in energy and
import prices dissipate and the labor market strengthens further. Near-term risks to the economic outlook appear roughly balanced. The Committee continues to closely monitor inflation indicators and global economic and financial developments.
view of realized and expected labor market conditions and inflation,
the Committee decided to raise the target range for the federal funds
rate to 1/2 to 3/4 percent. The stance of monetary policy remains
accommodative, thereby supporting some further strengthening in labor
market conditions and a return to 2 percent inflation.
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.
In light of the current shortfall of inflation from 2 percent, the
Committee will carefully monitor actual and expected progress toward its
inflation goal. The Committee expects that economic conditions
will evolve in a manner that will warrant only 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.
is maintaining its existing policy of reinvesting principal payments
from its holdings of agency debt and agency mortgage-backed securities
in agency mortgage-backed securities and of rolling over maturing
Treasury securities at auction, and it anticipates doing so until
normalization of the level of the federal funds rate is well under way.
This policy, by keeping the Committee's holdings of longer-term
securities at sizable levels, should help maintain accommodative
Voting for the FOMC monetary policy action
were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael
Brainard; James Bullard; Stanley Fischer; Esther L. George; Loretta J.
Mester; Jerome H. Powell; Eric Rosengren; and Daniel K. Tarullo.
note that Evans, Harker, Kaplan, Kashkari are voters this year,
replacing Bullard, George, Rosengren and Mester. On net, I see that as a
more dovish skew.