March 2, 2017

Northwest FCS News

Meeting Date:  May 2-3, 2017
Economic Highlights
Weak first quarter 2017 GDP growth declared to be "transitory".
  • Information received since the Federal Open Market Committee met in March indicates that the labor market has continued to strengthen even as growth in economic activity slowed.
  • The Committee views the slowing in growth during the first quarter as likely to be transitory.
  • Job gains were solid, on average, in recent months, and the unemployment rate declined.
  • Household spending rose only modestly, but the fundamentals underpinning the continued growth of consumption remained solid.
  • Inflation measured on a 12-month basis recently has been running close to the Committee's 2 percent longer-run objective. Excluding energy and food, consumer prices declined in March and inflation continued to run somewhat 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
Rates are unchanged.
  • In view of realized and expected labor market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 3/4 to 1 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 from March 2017 FOMC meeting - Fed balance sheet unchanged.
  • The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities.
  • Continue with policy of rolling over maturing Treasury securities at auction, and 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
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 votes 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:  June 13-14, 2017
The preceding information contains excerpts from an official published statement on the Federal Open Market Committee’s May 2-3, 2017 meeting.  For full text, please visit the Federal Reserve website.