Global| Jul 29 2015FOMC Holds Rates Steady; Sees Moderate Economic Growth and Stable Inflation Expectations
by:Tom Moeller
|in:Economy in Brief
Summary
At today's meeting of the Federal Open Market Committee, the Fed indicated that growth in consumer spending is moderate and the housing sector shows signs of improvement. Together with soft business investment and net exports, the [...]
At today's meeting of the Federal Open Market Committee, the Fed indicated that growth in consumer spending is moderate and the housing sector shows signs of improvement. Together with soft business investment and net exports, the labor market has continued to improve. Labor market slack has diminished this year but inflation remains low, and long-term price expectations have been stable.
Moderate economic growth was expected to continue while risks to the outlook were seen as balanced. Inflation is expected to rise to the Fed's 2 percent objective.
As a result of these views, the Fed elected to leave its target for the federal funds rate at 0 to 1/4 percent. The Fed indicated that "even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run."
The press release for today's FOMC meeting can be found here.
The backdrop to today's meeting was stable M2 growth of 5.8% y/y and monetary base growth of -0.12% y/y. In addition, the foreign exchange value of the U.S. dollar has risen 20.7% during the past year.
Haver's SURVEYS database contains the economic projections from the Federal Reserve Board.
| Current | Last | 2014 | 2013 | 2012 | 2011 | |
|---|---|---|---|---|---|---|
| Federal Funds Rate, % (Target) | 0.00-0.25 | 0.00-0.25 | 0.09 | 0.11 | 0.14 | 0.10 |
| Discount Rate, % | 0.75 | 0.75 | 0.75 | 0.75 | 0.75 | 0.75 |
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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