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Richmond Fed at a Glance

June 2018

Monetary Policy Update

Powell
FEDERAL RESERVE

Monetary Policy Update

  • During its June Meeting, the Federal Open Market Committee voted 8–0 to raise the target range for the federal funds rate to 1.75 percent to 2 percent. This marked the seventh interest-rate increase since the Fed began its rate-normalization campaign in December 2015.
  • This was the fourth FOMC meeting for Richmond Fed President Tom Barkin, who voted for the monetary policy action.
  • With regard to economic conditions, the Committee noted “that the labor market has continued to strengthen and that economic activity has been rising at a solid rate. Job gains have been strong, on average, in recent months, and the unemployment rate has declined. Recent data suggest that growth of household spending has picked up, while business fixed investment has continued to grow strongly.”
  • In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee said its assessment “will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.”
  • Policymakers also submitted quarterly economic projections. Several members project that the federal funds rate will be above its longer-run level by the end of next year.
  • Chairman Jerome Powell also held a post-meeting press conference. He noted that news conferences will be held after each FOMC meeting starting in January (compared to the current practice of after every other meeting), but that the change “does not signal anything about the timing and pace of our interest rate decisions.”
  • The next FOMC meeting is scheduled for July 31-August 1.

Resources: FOMC Statement June 12-13, 2018; Summary of Economic Projections; Press Conference

The FOMC holds eight regularly scheduled meetings each year.

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