Fed Funds Rate Unchanged – Fed Removes “Patient” Language

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 previously indicated it will be “patient” before deciding to increase the Fed Funds rate and moving towards normalization of monetary policy. Today, that language was not in the current statement but they also indicated it was unlikely the Fed Funds Target Rate would increase in April. This summer still seems likely to see a rate hike, but it may not be as high as anticipated prior to today.

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Release Date: March 18, 2015

For immediate release
Information received since the Federal Open Market Committee met in January suggests that economic growth has moderated somewhat. Labor market conditions have improved further, with strong job gains and a lower unemployment rate. A range of labor market indicators suggests that underutilization of labor resources continues to diminish. Household spending is rising moderately; declines in energy prices have boosted household purchasing power. Business fixed investment is advancing, while the recovery in the housing sector remains slow and export growth has weakened. Inflation has declined further below the Committee’s longer-run objective, largely reflecting declines in energy prices. 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. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators continuing to move toward levels the Committee judges consistent with its dual mandate. The Committee continues to see the risks to the outlook for economic activity and the labor market as nearly balanced. Inflation is anticipated to […]

Fed Funds Rate Unchanged – FOMC To Be “Patient”

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%.

Based upon the press release below, the FOMC will be “patient” before deciding to increase the Fed Funds rate and moving towards normalization of monetary policy. Of course they hedged everything by saying they could act sooner or later than expected, based upon real or prospective data. Our reading of the tea leaves says they will take some minor action this summer, even if it’s just telegraphing its coming move or creating a specific fed funds rate target instead of a range.

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Release Date: January 28, 2015

For immediate release
Information received since the Federal Open Market Committee met in December suggests that economic activity has been expanding at a solid pace. Labor market conditions have improved further, with strong job gains and a lower unemployment rate. On balance, a range of labor market indicators suggests that underutilization of labor resources continues to diminish. Household spending is rising moderately; recent declines in energy prices have boosted household purchasing power. Business fixed investment is advancing, while the recovery in the housing sector remains slow. Inflation has declined further below the Committee’s longer-run objective, largely reflecting declines in energy prices. Market-based measures of inflation compensation have declined substantially in recent months; 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. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators continuing to move toward levels the Committee judges consistent with its […]

Fed Funds Rate Unchanged – Timing Of Rate Increase Data Dependent

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%.

Based upon the press release below, the timing of the Fed Funds rate increase and movement towards normalization will be data dependent.

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Release Date: December 17, 2014

For immediate release
Information received since the Federal Open Market Committee met in October suggests that economic activity is expanding at a moderate pace. Labor market conditions improved further, with solid job gains and a lower unemployment rate. On balance, a range of labor market indicators suggests that underutilization of labor resources continues to diminish. Household spending is rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow. Inflation has continued to run below the Committee’s longer-run objective, partly reflecting declines in energy prices. Market-based measures of inflation compensation have declined somewhat further; 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. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators moving toward levels the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for economic activity and the labor market as nearly balanced. The Committee expects inflation to rise gradually toward 2 percent as the labor market improves further and the transitory effects of lower energy prices and other factors dissipate. The Committee continues to monitor inflation developments closely.

To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the […]

Fed Funds Rate Unchanged – QE Done

The Federal Reserve has finished tapering its asset purchases and ended the six year, systematic, large, monthly purchases of government and mortgage bonds known as QE (Quantitative Easing.) The Fed will continue to purchase Treasury and Mortgage Securities every month to maintain the current asset levels on the balance sheet of over $4.5 Trillion. There is no indication when it will begin to let current holdings mature and not replace them.

The Fed Funds Rate remains the same with a target range of 0.00% to 0.25%.

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Release Date: October 29, 2014

For immediate release
Information received since the Federal Open Market Committee met in September suggests that economic activity is expanding at a moderate pace. Labor market conditions improved somewhat further, with solid job gains and a lower unemployment rate. On balance, a range of labor market indicators suggests that underutilization of labor resources is gradually diminishing. Household spending is rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow. Inflation has continued to run below the Committee’s longer-run objective. Market-based measures of inflation compensation have declined somewhat; 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. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators and inflation moving toward levels the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for economic activity and the labor market as nearly balanced. Although inflation in the near term will likely be held down by lower energy prices and other factors, the Committee judges that the likelihood of inflation running persistently […]

Fed Funds Rate Unchanged – Taper To Continue

The Federal Reserve will continue tapering purchases of government and mortgage bonds. They intend to purchase $10 billion in government bonds per month (down from $45 billion before tapering began) and $5 billion per month in mortgage bonds (down from $40 billion before tapering began.) The Fed Funds Rate remains the same with a target range of 0.00% to 0.25%.

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Release Date: September 17, 2014

For immediate release
Information received since the Federal Open Market Committee met in July suggests that economic activity is expanding at a moderate pace. On balance, labor market conditions improved somewhat further; however, the unemployment rate is little changed and a range of labor market indicators suggests that there remains significant underutilization of labor resources. Household spending appears to be rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow. Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. Inflation has been running below the Committee’s longer-run objective. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators and inflation moving toward levels the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for economic activity and the labor market as nearly balanced and judges that the likelihood of inflation running persistently below 2 percent has diminished somewhat since early this year.

The Committee currently judges that there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions. In light of the cumulative progress toward maximum employment and the improvement […]