The Federal Open Market Committee (FOMC) unanimously voted to hold the current target for the federal funds rate at 50-75 basis points in February. “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 1/2 to 3/4 percent. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a return to 2 percent inflation,” said the FOMC in a statement following their Wednesday meeting.
The Committee noted that information received since their last meeting in December indicates that the labor market has continued to strengthen and that economic activity has continued to expand at a moderate pace. Federal Reserve officials acknowledged improvement in consumer and business sentiment, as well as a moderate rise in household spending.
The Committee did not provide any clues as to when it might next raise rates. Uncertainty remains regarding the new presidential administration, forcing officials to take more of a wait and see approach. “In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to 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.”
Read the FOMC statement.
