June 19, 2019

Northwest FCS News

Meeting Date:  June 18-19, 2019
Economic Highlights
FOMC declares the economy has changed little since their last meeting of May 2019. While labor markets remain healthy, household spending has picked up slightly and business fixed investment remains weak compared to earlier this year. Inflation remains below the 2.0% goal. Longer-term inflation expectations are relatively stable.
  • “Information received since the Federal Open Market Committee met in May indicates that the labor market remains strong and that economic activity is rising at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low.
  • Although growth of household spending appears to have picked up from earlier in the year, indicators of business fixed investment have been soft.
  • On a 12-month basis, overall inflation and inflation for items other than food and energy are running below 2%. Market-based measures of inflation compensation have declined; survey-based measures of longer-term inflation expectations are little changed.”
Policy Announcements
Fed funds rate unchanged at the range of 2.25-2.50%. And Fed remains determined to keep the expansion from ending. Data will drive future rate decisions. But Fed admits the future has become more uncertain!
  • “Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 2-1/4 to 2-1/2%.
  • The Committee continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2% objective as the most likely outcomes, but uncertainties about this outlook have increased.
  • In light of these uncertainties and muted inflation pressures, the Committee will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2% objective.”
Forward Guidance
The Fed indicated that future rate hikes will depend on economic conditions such as labor market changes, indicators of inflation pressures and any changes in inflation expectations.”
  • “In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2% inflation objective.
  • This 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.”
Voting Results
One dissenting vote - James Bullard wanted to cut rates by 25 basis points at this meeting
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Charles L. Evans; Esther L. George; Randal K. Quarles; and Eric S. Rosengren. Voting against the action was James Bullard, who preferred at this meeting to lower the target range for the federal funds rate by 25 basis points.
Next Meeting:  July 30-31, 2019


The preceding information contains excerpts from an official published statement on the Federal Open Market Committee’s June 18-19, 2019 meeting.  For full text, please visit the Federal Reserve website.