The Federal Reserve kept the Fed Funds Rate unchanged at the conclusion of today’s FOMC meeting. The rate remains in a target range of 0.00% to 0.25%.
The FOMC continues to be implicitly patient in deciding when to increase the Fed Funds rate and move towards normalization of monetary policy. They are waiting for the labor market and inflation to heat back up before making any rate moves or signaling an imminent rate hike. It seems much less likely the Fed Funds Target Rate would increase this summer (and maybe even this year) as the FOMC is now unanimously timid in their approach to normalization and will be looking for solid cover before making a move.
Release Date: April 29, 2015
For immediate release
Information received since the Federal Open Market Committee met in March suggests that economic growth slowed during the winter months, in part reflecting transitory factors. The pace of job gains moderated, and the unemployment rate remained steady. A range of labor market indicators suggests that underutilization of labor resources was little changed. Growth in household spending declined; households’ real incomes rose strongly, partly reflecting earlier declines in energy prices, and consumer sentiment remains high. Business fixed investment softened, the recovery in the housing sector remained slow, and exports declined. Inflation continued to run below the Committee’s longer-run objective, partly reflecting earlier declines in energy prices and decreasing prices of non-energy imports. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Although growth in output and employment slowed during the first quarter, the Committee continues to expect that, with appropriate policy accommodation, economic activity […]