Meeting Date: March 15-16, 2016

Economic Highlights
Economic activity expanding slowly, but global economic and financial issues have provided headwinds to growth. Housing sector improving, but business fixed investment and net exports weaker.
“Information received since the Federal Open Market Committee met in January suggests that economic activity has been expanding at a moderate pace despite the global economic and financial developments of recent months. Household spending has been increasing at a moderate rate, and the housing sector has improved further; however, business fixed investment and net exports have been soft. A range of recent indicators, including strong job gains, points to additional strengthening of the labor market. Inflation picked up in recent months; however, it continued to run below the Committee's 2 percent longer-run objective, partly reflecting declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months.”

Policy Announcements
Fed keeps Fed Funds rate fixed for second consecutive meeting but claims new policy is still “Accommodative”.
"…the Committee decided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation.”

Fed’s Security Holdings
No change from last FOMC meeting.  Total dollars injected into the economy from the Large Scale Asset Purchase programs to remain constant.
“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, and it anticipates doing so until normalization of the level of the federal funds rate is well under way. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.”

Forward Guidance
The FOMC will raise rates very slowly and only if the economy continues to improve, and the committee warns that rates are likely to remain below levels that are expected to prevail in the longer run for some time!
“The Committee expects that economic conditions will evolve in a manner that will warrant only 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
Esther George, Kansas City Fed president dissents.  She prefers to raise rates immediately.
Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; James Bullard; Stanley Fischer; Loretta J. Mester; Jerome H. Powell; Eric Rosengren; and Daniel K. Tarullo. Voting against the action was Esther L. George, who preferred at this meeting to raise the target range for the federal funds rate to 1/2 to 3/4 percent.

Next Meeting: April 26-27, 2016

The preceding information contains excerpts from an official published statement on the Federal Open Market Committee’s March 15-16, 2016 meeting.  For full text, please visit the Federal Reserve website.