Global| Sep 26 2018FOMC Increases Fed Funds Rate Target
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Open Market Committee voted unanimously at today's meeting to increase the federal funds rate target 25 basis points to a range between 2.00% and 2.25%. The last time the range was set this high was in April 2008. The [...]
The Federal Open Market Committee voted unanimously at today's meeting to increase the federal funds rate target 25 basis points to a range between 2.00% and 2.25%. The last time the range was set this high was in April 2008. The increase was expected in the Action Economics Forecast Survey.
As indicated at the last meeting, the FOMC noted "that the labor market has continued to strengthen and that economic activity has been rising at a strong rate." Meanwhile, overall inflation and inflation less food & energy remain near the 2% objective, and longer-term inflation expectations are little changed.
Despite the strength of the economy, the Fed continued to indicate that "risks to the economic outlook appear roughly balanced."
Updated economic projections were made available at the meeting. They include real GDP growth of 3.1% this year, 2.5% in 2019, 2.0% in 2020 and 1.8% in 2021, updated from 2.8%, 2.4% and 2.0%, respectively. The 2021 projection is newly added. The expected core PCE inflation was unchanged at 2.0% this year, then steady at 2.1% thereafter. The civilian unemployment was seen at 3.7% this year, raised from 3.6%, followed by 3.5% in 2019 and 2020, then 3.7% in 2021. These jobless rate projections were updated from 3.6% and 3.5% in 2019 and 2020.
The press release for today's FOMC meeting can be found here.
The Action Economics Forecast Survey can be found in the AS1REPNA database. Haver's SURVEYS database contains the economic projections from the FOMC.
| Current | Last | 2017 | 2016 | 2015 | 2014 | |
|---|---|---|---|---|---|---|
| Federal Funds Rate Target | 2.00% - 2.25% | 1.75% - 2.00% | 1.00% | 0.40% | 0.13% | 0.09% |
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.
