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.
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 […]