July 27, 2016
The Federal Open Market Committee left the federal funds rate target unchanged as expected at 0.25-0.50% and released a statement that upgraded labor market conditions but otherwise pretty much retained the same economic assessment. Unlike the previous mid-June result, the decision to leave policy unchanged was not unanimous. As she had done at meetings in March and April but not in June, Kansas City Federal Reserve District President Esther George favored a 25-basis point interest rate hike. The committee as before anticipates a gradual increase in its interest rate but notes too that “the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.” The timing of future rate increases will hinge on ” measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.”
Copyright 2016, Larry Greenberg. All rights reserved. No secondary distribution without express permission.