September 18, 2024
According to the U.S. Federal Reserve, recent indicators show that economic activity is expanding steadily. Although job gains have slowed and the unemployment rate has risen slightly, it remains low. Inflation is making progress towards the Committee’s 2 percent target but is still somewhat elevated. The Committee aims to achieve maximum employment and a 2 percent inflation rate over the long term and is now more confident that inflation is moving sustainably towards this target. They believe the risks to their employment and inflation goals are balanced, despite an uncertain economic outlook.
In light of the progress on inflation and the balanced risks, the Committee decided to lower the federal funds rate target range by 0.5 percentage points to 4.75-5 percent. They will carefully evaluate incoming data, the evolving outlook, and the balance of risks before making further adjustments. Additionally, the Committee will continue to reduce its holdings of Treasury securities and agency debt and mortgage-backed securities, demonstrating their commitment to supporting maximum employment and returning inflation to the 2 percent target.
The Committee is strongly committed to monitoring the implications of incoming information for the economic outlook and will adjust monetary policy as needed to achieve their goals. Their assessments will consider a wide range of factors, including labour market conditions, inflation pressures and expectations, and financial and international developments. This approach ensures that the Committee remains attentive to the risks on both sides of its dual mandate.
Federal Funds Target Rate
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