Though several members agreed that the U.S. economy is moving towards their objectives, the Federal Open Market Committee (FOMC) in June concluded that conditions did not yet warrant an increase in the federal funds rate.
The Fed officials agreed that weakness in the first quarter’s economic growth was due at least partly to transitory factors, and expected greater economic growth in the second half of this year. Though some uncertainty was expressed about the extent of the advance in the near term, moderate growth was expected by the committee over the medium term.
Most members agreed that stability in oil prices had put downward pressure on inflation. However, all but one member believed that they would need to see more evidence that economic growth was strong enough and labor markets firm enough to return inflation to the 2 percent objective before normalizing monetary policy.
The committee also discussed how they intend to communicate their first rate hike to the public, outlining plans to issue an implementation note separate from the Committee’s post meeting statement. This implementation note will contain operational and technical details regarding the setting of policy tools, and will be issued around the time of the first increase in the target range.