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March

March 2019

Monetary Policy Update

Powell press conference FOMC
Federal Reserve
  • The Federal Open Market Committee (FOMC) noted global economic and financial developments and “muted inflation pressures” as factors in foregoing a rate adjustment during its March 19–20 meeting. Instead, policymakers voted 10–0 to maintain the target range for the federal funds rate at 2.25 percent to 2.5 percent. 
  • In its statement, the Committee said it “continues to view sustained expansion of economic activity, strong labor market conditions and inflation near the Committee's symmetric 2 percent objective as the most likely outcomes. In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes.” 
  • With regards to economic conditions, the Committee said: “the labor market remains strong but that growth of economic activity has slowed from its solid rate in the fourth quarter [of 2018]. Payroll employment was little changed in February, but job gains have been solid, on average, in recent months, and the unemployment rate has remained low.”
  • In determining future adjustments to the federal funds rate, the Committee said it would “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.”
  • Fed Chairman Jay Powell, during a news conference following the meeting, described the outlook for the U.S. economy as “positive,” and offered insights into the Committee’s decision. “[T]he data that we’re seeing are not currently sending a signal, which suggests moving in either direction for me, which is really why we're being patient. We feel, our policy rate is in the range of neutral. The economy is growing at about trend. Inflation is close to target. Employment is under 3 percent. It's a great time for us to be patient and watch and wait and see how things evolve,” Powell told the media.
  • The next FOMC meeting is scheduled for May 1–2, 2019.

Resources: FOMC March 19-20, 2019; News Conference Transcript; Balance Sheet Normalization Principles and Plans   

The FOMC holds eight regularly scheduled meetings each year. All meetings are followed by a news conference. 2019 FOMC Schedule

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