Fed boosts target for federal funds rate by 25 basis points to 1.5%-1.75%
The Federal Reserve says in today’s statement, “In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1-1/2 to 1-3/4 percent.
The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation…
Voting for the FOMC monetary policy action were Jerome H. Powell, Chairman; William C. Dudley, Vice Chairman; Thomas I. Barkin; Raphael W. Bostic; Lael Brainard; Loretta J. Mester; Randal K. Quarles; and John C. Williams.”
In its updated economic projections of Federal Reserve Board members and Federal Reserve Bank presidents under their individual assessments of projected appropriate monetary policy for their March meeting, the Federal Reserve members kept their median expectation for the Federal funds rate at the end of 2018 at 2.1%, consistent with their December projection.
The projections, often referred to as a summary of the Fed’s “dots,” shows that the median expectation for the end of 2019 Federal funds rate is now 2.9%, up from 2.7% in the December projection.
The Federal Reserve says in today’s statement, “Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability.
The economic outlook has strengthened in recent months.
The Committee expects that, with further gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace in the medium term and labor market conditions will remain strong. Inflation on a 12-month basis is expected to move up in coming months and to stabilize around the Committee’s 2 percent objective over the medium term.
Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.”
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