Date: June 19, 2019
Based on the latest information received by the Federal Open Market Committee (FOMC) since May, the FOMC has noticed the labour market remained strong, whilst economic activity has been rising at a solid rate. According to the FOMC, “on average, in recent months job gains have been strong and the unemployment rate has remained low.” Household spending has continued to grow strongly, along with the growth of business fixed investment has moderated from its rapid pace earlier in the year. The statement indicated that, “On a 12-month basis, both overall inflation and inflation for items other than food and energy have declined and are running below 2 percent. Market-based measures of inflation compensation have declined, indicators of longer-term inflation expectations have little changed.”
In line with its decree, the Committee seeks to foster maximum employment and price stability. The Committee continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2% objective as the most likely outcomes.
The FOMC decided to maintain the target range for the federal funds rate at 2.25% – 2.50% considering the realized and expected labour market conditions and inflation. The FOMC stated that, “in determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labour market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.”
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