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January 2019

Monetary Policy Update

Fed Chair Powell addressing reporters
Federal Reserve
  • During its December 2018 meeting, the Federal Open Market Committee (FOMC) voted 10–0 to increase its target range for the federal funds rate to 2.25 percent to 2.5 percent. This was the fourth increase in 2018 and the ninth since policymakers began normalizing rates in December 2015.
  • In its statement, the Committee said that “some further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective over the medium term.”
  • Regarding the economy, the Committee specifically noted: “Job gains have been strong, on average, in recent months, and the unemployment rate has remained low. Household spending has continued to grow strongly, while the growth of business fixed investment has moderated from its rapid pace earlier in the years. On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2 percent. Indicators of longer-term inflation expectations are little changed, on balance.”
  • This was Richmond Fed President Thomas I. Barkin’s final meeting of his 2018 rotation as a voting member of the FOMC.
  • The next FOMC meeting is scheduled for January 29-30, 2019.

Resources: FOMC statement December 18-19, 2018; Summary of Economic Projections; News Conference; FOMC 2019 Schedule

The FOMC holds eight regularly scheduled meetings each year.

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