FOMC No Longer Inclined to Hike Fed Funds Rate This Year
March 20, 2019
Today’s released FOMC statement asserts that the slowdown of growth in the final quarter of 2018 persisted in the early going of 2019. Headline inflation has declined, too, and market-based measures of inflation compensation “have remained low in recent months.” The final three paragraphs of the statement are identical to the one from January 30th. The dot-plot diagram, which in December had implied two rate hikes during 2019, now suggests that the 2.25-2.5% federal funds rate as of end-2018 will be no different at the end of this year.
The accompanying updated forecasts cut projected growth in 2019 and 2020. The projected personal consumption inflation rate is also reduced for both 2019 and 2020, while the unemployment forecast has been increased. Committee members on balance foresee just one 25-basis point rate hike in 2020 and none in 2021.
Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: FOMC statement
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