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Economy in Brief

FOMC Lifts Target Interest Rate
by Tom Moeller  March 15, 2017

At today's meeting of the Federal Open Market Committee, the targeted federal-funds rate was increased to a range of 0.75% to 1.00%, from 0.50% to 0.75%. It remained the highest target range since the end of 2008, and followed two earlier increases from a 2015 low of 0.12%.

In new language, the Fed indicated that inflation was moving close to its long-term objective of 2%. As stated earlier, accommodative monetary policy was seen to have promoted a further strengthening of labor market conditions.

The Fed continued to indicate that future interest rate adjustments would reflect inflation, labor market conditions and expected inflation readings, as well as financial and international developments.

Expected growth in real GDP was unchanged by the Fed at 2.1% this year and next, then 1.9% in 2019. The expected core PCE price inflation rate was raised slightly for this year to 1.9%, followed by unchanged expectations for 2.0% price growth. Expected unemployment held steady at 4.5% through 2019. The fed funds rate was expected to be roughly 3.0% by the end of 2019.

The press release for today's FOMC meeting can be found here.

Haver's SURVEYS database contains the economic projections from the Federal Reserve Board.

Current Last 2016 2015 2014 2013
Federal Funds Rate Target 0.75%-1.00% 0.50%-0.75% 0.40% 0.13% 0.09% 0.11%
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