FOMC Keeps 2-2.25% Federal Funds Target Range as Expected

November 8, 2018

With no press conference planned, the Federal Open Market released a statement¬†at 14:00 EST (15:00 GMT) that is very similar to the previous meeting’s one, when policy was tightened. As expected this time the fed funds target was left unchanged, but no doubt was left about more rate normalization as officials reiterated the clause “in determining the timing and size of future adjustments to the target range for the federal funds rate….” Below are the minor changes to today’s document:

  1. The characterization of unemployment now is “stayed low” rather than “has declined.”
  2. Business fixed investment, which had “continued to grow strongly,” is now said to have “moderated from its rapid pace earlier this year.”
  3. Although the vote was again unanimous and 9-0, the newly appointed San Francisco Fed President, Mary C. Daly, cast her vote, which instead had been performed at the September meeting by K.C. Fed Presdient Esther George. John Williams was Daly’s predecessor at S.F., is now the N.Y. Fed President, and thus still has a voting role. Daly joined the San Francisco Fed in 1996 and was Executive Vice President and Director of Research at the bank in her previous role.

At the next scheduled FOMC meeting on December 18-19, the federal funds target range is expected to get raised to 2.25-2.50%, and there will be a press conference afterwards for Chairman Jay Powell to explain the committees latest thinking and forecasts.

Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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