Meeting Date: March 17-18, 2015

Meeting Highlights
FOMC keeps interest rates unchanged and declared rates will not be increased at the next meeting in April. The committee drops the concept of being ‘patient’ in their timing for rate hikes, and adopts a new forward guidance stance that will be ‘data dependent’ and not driven by the calendar.

Fed’s Take on the U.S. Economy
“… economic growth has moderated somewhat. Labor market conditions have improved further, with strong job gains and a lower unemployment rate. A range of labor market indicators suggests that underutilization of labor resources continues to diminish. Household spending is rising moderately; declines in energy prices have boosted household purchasing power. Business fixed investment is advancing, while the recovery in the housing sector remains slow and export growth has weakened. Inflation has declined further below the Committee's longer-run objective, largely reflecting declines in energy prices.”

Policy Announcements
Rates Unchanged: “To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate.”

Normalization of Security Holdings: “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. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.”

Forward Guidance
While the FOMC did not change interest rates or the policy of the 100% reinvestment of maturing principal from their security holdings, the committee did opt to change the forward guidance they dispense to the public regarding future interest rate changes. For the past few months, the FOMC declared they would be ‘patient’ in making a decision to raise interest rates. At this meeting, the committee announced that decisions to raise rates will be ‘data dependent,’ and that a rate hike is not imminent.

The FOMC policy release makes in clear rates will not be raised at the next meeting in April. In determining how long to maintain this target range, the Committee will assess progress - both realized and expected - toward its objectives of maximum employment and 2 percent inflation. 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. Consistent with its previous statement, the Committee judges that an increase in the target range for the federal funds rate remains unlikely at the April FOMC meeting.

Voting Results
Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Charles L. Evans; Stanley Fischer; Jeffrey M. Lacker; Dennis P. Lockhart; Jerome H. Powell; Daniel K. Tarullo; and John C. Williams.

Next Meeting: April 28-29, 2015