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Economy in Brief

FOMC Holds Interest Rates Steady
by Tom Moeller  November 8, 2018

The Federal Open Market Committee voted unanimously at today's meeting to maintain the federal funds rate target in a range between 2.00% and 2.25%. The action was expected in the Action Economics Forecast Survey.

The Fed indicated that "further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity."

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 2 percent. Indicators of longer-term inflation expectations are little changed, on balance." In a change from earlier commentary, it was noted that business fixed investment growth had moderated from its rapid pace earlier in the year.

Consumer price inflation, both overall and excluding food & energy, continued to be seen at 2% through 2021. Longer-term inflation expectations were seen as steady.

The Fed continued to indicate that "risks to the economic outlook appear roughly balanced."

Updated economic projections were not offered at this meeting. Projections available at the September meeting included real GDP growth of 3.1% this year, 2.5% in 2019, 2.0% in 2020 and 1.8% in 2021, respectively. The expected core PCE inflation was 2.0% this year, then 2.1% thereafter. The civilian unemployment was seen at 3.7% this year, followed by 3.5% in 2019 and 2020, then 3.7% in 2021.

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% 2.00% - 2.25% 1.00% 0.40% 0.13% 0.09%
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