Global| Jun 10 2020FOMC Holds Fed Funds Rate Near Zero & Updates Economic Projections
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Reserve left the target for the Fed funds rate in a range of 0.00% to 0.25% at today's meeting of the FOMC. In the Fed's press release, it stated, "The coronavirus outbreak is causing tremendous human and economic hardship [...]
The Federal Reserve left the target for the Fed funds rate in a range of 0.00% to 0.25% at today's meeting of the FOMC.
In the Fed's press release, it stated, "The coronavirus outbreak is causing tremendous human and economic hardship across the United States and around the world. The virus and the measures taken to protect public health have induced sharp declines in economic activity and a surge in job losses."
"The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term and poses considerable risks to the economic outlook over the medium term."
"The Committee will closely monitor developments and is prepared to adjust its plans as appropriate."
The Fed also indicated it will continue to increase its bond holdings, targeting Treasury purchases at $80 billion per month and mortgage-backed securities at $40 billion.
The full statement issued following today's meeting can be found here.
Today's action was unanimously supported by Committee members.
| Current | Last | 2019 | 2018 | 2017 | 2016 | |
|---|---|---|---|---|---|---|
| Federal Funds Rate Target | 0.0% - 0.25% | 0.0% - 0.25% | 2.16% | 1.83% | 1.00% | 0.40 |
The Fed also released updated economic projections:
| 2020 (Q4/Q4) | 2021 (Q4/Q4) | 2022 (Q4/Q4) | |
|---|---|---|---|
| Real GDP | -6.5% | 5.0% | 3.5% |
| PCE Inflation | 0.8% | 1.6% | 1.7% |
| Core PCE Inflation | 1.0% | 1.5% | 1.7% |
| Civilian Unemployment Rate | 9.3% | 6.5% | 5.5% |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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