At its meeting today, the Federal Open Market Committee (FOMC) unanimously voted to hold the target range for the federal funds rate steady at 1.0 to 1.25 percent. The committee most recently raised rates by 25 basis points in their June meeting but signaled one more rate hike in 2017. This year’s final meeting is scheduled to occur in December.
The FOMC recognized that the labor market and economic activity have continued to strengthen despite hurricane-related disruptions. Committee members “expect 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.”
Committee members acknowledged September’s inflation rate was boosted by gasoline prices that largely rose due to hurricane activity . The core prices index, inflation for items other than food and energy, was 1.3%, well below the Fed’s 2% target rate. The statement noted “the balance sheet normalization program initiated in October 2017 is proceeding.”