July 26, 2017

Northwest FCS News

Meeting Date:  July 25-26, 2017
Economic Highlights
Labor markets seen as improving, economic activity rising moderately, and inflation remains below goal.
  • Information received since the Federal Open Market Committee met in June indicates that the labor market has continued to strengthen and that economic activity has been rising moderately so far this year.
  • Job gains have been solid, on average, since the beginning of the year, and the unemployment rate has declined. Household spending and business fixed investment have continued to expand.
  • On a 12-month basis, overall inflation and the measure excluding food and energy prices have declined and are running below 2 percent.
  • Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.
Policy Announcements
Rate unchanged.
  • The Committee decided to maintain the target range for the federal funds rate at 1.0 to 1.25 percent.
  • The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation.
Fed’s Security Holdings
No change in reinvestment policy yet, but Fed pledges change soon.
  • For the time being, the Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction.
  • The Committee expects to begin implementing its balance sheet normalization program relatively soon, provided that the economy evolves broadly as anticipated; this program is described in the June 2017 Addendum to the Committee's Policy Normalization Principles and Plans.
Forward Guidance
Rates to rise slowly and gradually going forward.
  • The Committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate.
  • The federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.
  • However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.
Voting Results
No dissenting vote at this meeting.
  • Voting for the FOMC monetary policy action were:  Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Charles L. Evans; Stanley Fischer; Patrick Harker; Robert S. Kaplan; Neel Kashkari; and Jerome H. Powell.
Next Meeting:  September 19-20, 2017
The preceding information contains excerpts from an official published statement on the Federal Open Market Committee’s July 25-26, 2017 meeting.  For full text, please visit the Federal Reserve website.