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Economy in Brief
German PPI Fails to Ring Alarm Bells
Inflation trends in Germany continue to move up toward or to the 2% mark...
U.S. Leading Economic Indicators Continue to Strengthen
The Conference Board's Composite Index of Leading Economic Indicators increased 0.6% (6.3% y/y) during July...
EMU Inflation Picture Gets as Dicey as the Outlook for EMU Policy
The EMU inflation picture has begun to get dicey with headline inflation at or above 2% for two months running...
U.S. Housing Starts Improvement Is Disappointing
Start-up activity in the housing market remained under pressure during July...
Philadelphia Fed Factory Conditions & Prices Soften
The Philadelphia Fed reported that its General Factory Sector Business Conditions Index declined sharply to 11.9 during August ...
by Tom Moeller January 31, 2018
At today's meeting of the Federal Open Market Committee, the federal funds rate target was held steady in a range of 1.25%-1.50%. The financial markets had expected today's action as indicated in the Action Economics Forecast Survey.
The Fed continued to characterize the stance of monetary policy as accommodative. Growth in the labor market and in consumer and business spending was viewed as "solid." Overall price inflation and prices excluding food & energy are expected to rise this year, then stabilize near the Fed's 2% objective.
The Fed's expectation for economic growth this year is 2.5%, then 2.1% in 2019. Expected PCE price inflation in 2018 is 1.9%, then 2.0% next year. The expected unemployment rate next year is 3.9%. As a result, the targeted level of the fed funds rate will increase to 2.1%, then 2.7% in 2019.
The press release for today's FOMC meeting can be found here.
Haver's SURVEYS database contains the economic projections from the FOMC.
| Current | Last | 2017 | 2016 | 2015 | 2014 | |
|---|---|---|---|---|---|---|
| Federal Funds Rate Target | 1.25%-1.50% | 1.25%-1.50% | 1.00% | 0.40% | 0.13% | 0.09% |
