Full text of the Federal Reserve's interest rate decision: For the seventh time in a row, it has sharply cut its expectations for interest rate cuts

Golden Ten New Media

2024-06-13 02:12Published in Guangdong

The Fed has kept interest rates unchanged, but the dot plot shows that the number of rate cuts has fallen to just one during the year.

On June 13, the Federal Reserve announced its latest interest rate decision, and the target range for the federal funds rate remained unchanged at 5.25-5.5% for the seventh consecutive time.

The dot plot shows a 25 basis point cut in 2024 (75 basis points expected in March), with no official expecting three or more rate cuts this year, up from 10 previously; Four rate cuts are expected in 2025 (three in March). Four Fed officials do not expect to cut rates this year, up from two in March. Seven officials are expected to cut rates once this year, and eight are expected to cut rates twice.

In addition, the summary of economic projections shows that the Fed expects the median core PCE inflation expectations from 2024 to the end of 2026 to be 2.8%, 2.3%, and 2.0%, respectively. (March forecasts are 2.6%, 2.2%, 2.0%, respectively).

Full text of the interest rate decision

Recent indicators suggest that economic activity continues to expand steadily. Job growth remains strong and the unemployment rate remains low. Inflation has slowed over the past year, but remains elevated. In recent months, the Committee has made modest further progress on its 2% inflation target.

The Commission seeks to achieve maximum employment and 2% inflation over the long term. The Committee judged that the risks to achieving the employment and inflation targets had become better balanced over the past year. The economic outlook is uncertain and the Committee remains highly concerned about inflation risks.

In support of its objectives, the Committee decided to maintain the target range for the federal funds rate at 5.25-5.5%. In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess the latest data, the evolving outlook, and the balance of risks. The Committee did not expect to lower the interest rate target range until it was more confident that inflation would continue to move towards 2%. In addition, the Committee will continue to reduce its holdings of Treasuries, agency debt, and agency mortgage-backed securities. The Committee is firmly committed to returning inflation to its 2% target.

In assessing the appropriate monetary policy stance, the Committee will continue to monitor the impact of new information on the economic outlook. The Committee will be prepared to adjust its monetary policy stance as appropriate if risks arise that could impede the achievement of the Committee's objectives. The Committee's assessment will take into account a wide range of information, including labour market conditions, inflationary pressures, inflation expectations, and data on financial and international developments.

The decision was adopted by all members, including the chairman, Jerome Bush. Jerome H. Powell; John S. C. Williams, Vice Chair; Thomas Barkin; Michael S. S. Barr; Raphael S. W. Bostic; Michelle S. W. Bowman; Lisa S. D. Cook; Mary S. C. Daley; Philip Jefferson; Adriana S. D. Coogler; Loretta S. J. Mester; and Christopher S. J. Waller.

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