Global| Jun 20 2012FOMC Sees Moderate Economic Growth and Less Inflation
by:Tom Moeller
|in:Economy in Brief
Summary
As expected, the Federal Open Market Committee today left the Federal funds rate in a "range from 0 to 1/4 percent." The Fed funds rate has remained unchanged since late-2008 at its lowest level ever. The discount rate also was left [...]
As expected, the Federal Open Market Committee today left the Federal
funds rate in a "range from 0 to 1/4 percent." The Fed funds
rate has remained unchanged since late-2008 at its lowest level ever. The
discount rate also was left unchanged at 0.75%. The Fed indicated that the
economy may warrant an exceptionally low Fed funds rate at least through
late 2014.
Some change in the assessment of the economy was evident in the Fed's communiqué versus earlier meetings. "... growth in employment has slowed in recent months, and the unemployment rate remains elevated." Moreover, "Household spending appears to be rising at a somewhat slower pace than earlier in the year."
The Fed also changed its prior inflation call. "Inflation has declined, mainly reflecting lower prices of crude oil and gasoline, and longer-term inflation expectations have remained stable."
The Fed's economic projections call for GDP growth to pickup to 2.50% and 3.25% next year and 2014, respectively. Overall inflation and core inflation expectations were lowered to 1.75% and 1.80%, respectively. The unemployment rate is expected to fall to 7.35% in 2014.
The Committee also decided to continue through the end of the year its program to extend the average maturity of its holdings of securities.
The press release for today's FOMC meeting can be found here.
The Haver databases USECON, WEEKLY and DAILY contain the figures from the Federal Reserve Board.
| Current | Last | 2011 | 2010 | 2009 | 2008 | |
|---|---|---|---|---|---|---|
| Federal Funds Rate, % (Target) | 0.00-0.25 | 0.00-0.25 | 0.10 | 0.17 | 0.16 | 1.93 |
| Discount Rate, % | 0.75 | 0.75 | 0.75 | 0.72 | 0.50 | 2.39 |
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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