FOMC Keeps Fed Funds Rate Unchanged

The Federal Reserve kept the Fed Funds Rate unchanged at the conclusion of their FOMC meeting today. The rate will continue to be a target range of 5.25% to 5.50%. They also continue to condition any adjustments to the target range on incoming data, the evolving outlook, and the balance of risks.

Banks will keep the Prime Rate at 8.50%.

The Federal Reserve says it will continue to reduce its holdings of mortgage and treasury securities according to the same plan it announced in May 2022, reducing mortgage securities by $35 billion per month and treasury securities by $60 billion per month. They have yet to hit the cumulative targets in their efforts at tapering their balance sheet and continue to maintain a much higher balance sheet than projected. It is anticipated there will be a move to slow the rate of reduction of their balance sheet sometime in the next quarter.

 


Press Release

March 20, 2024

Federal Reserve issues FOMC statement
For release at 2:00 p.m. EDT

Recent indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals are moving into better balance. The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks.

In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Michael S. Barr; Raphael W. Bostic; Michelle W. Bowman; Lisa D. Cook; Mary C. Daly; Philip N. Jefferson; Adriana D. Kugler; Loretta J. Mester; and Christopher J. Waller.

For media inquiries, please email media@frb.gov or call 202-452-2955.

Implementation Note issued March 20, 2024