The Federal Open Market Committee today announced it would maintain the target range for the federal funds rate at 5.25% – 5.5%.
In its statement, the FOMC said that “recent indicators suggest that economic activity expanded at a strong pace in the third quarter. Job gains have moderated since earlier in the year but remain strong, and the unemployment rate has remained low. Inflation remains elevated.”
In response to the resilient economy, Federal Reserve Chairman Jerome Powell stated that “I still believe, and my colleagues for the most part still believe, that it is likely to be true … that we will need to see some slower growth and some softening in the labor market to fully restore price stability.” He even acknowledged that “we may have underestimated the balance sheet strength of households and small businesses and that may be part of it.”
Lastly, Powell cautioned about reading too much into FOMC’s Statement of Economic Projections and emphasized that “it’s not a promise or a plan of the future.” The Summary of Economic Projections indicated that Fed officials expected one more rate hike this year.
Read the Federal Reserve statement.