No Fed Hike in September

The Federal Open Market Committee (FOMC) maintained the current target for the federal funds rate at 25-50 basis points in September. In a post-meeting statement, the Committee noted that the case for an increase in rates “has strengthened,” but decided to “wait for further evidence of continued progress toward its objectives.”

illinois-washington-visit-final-9-21-16“Our decision does not reflect a lack of confidence in the economy,” said Federal Reserve Chair Janet Yellen during a post-meeting press conference. “Conditions in the labor market are strengthening, and we expect that to continue.”

“Near-term risks to the economic outlook appear roughly balanced,” said the FOMC in their written statement following the meeting. “The Committee expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will strengthen somewhat further.”

The decision to maintain accommodative monetary policy was not unanimous. Kansas City President Esther George, Cleveland President Loretta Mester, and Boston Federal Reserve President Eric Rosengren dissented from today’s meeting action; each of whom expressed a preference to raise the target range to 50-75 bps.