June 12, 2024
The Federal Reserve reports that economic activity continues to expand solidly, with strong job gains and low unemployment rates. Although inflation has decreased over the past year, it remains high. Recently, there has been modest progress towards the Fed’s 2 percent inflation target. The Fed aims to achieve maximum employment and maintain inflation at 2 percent over the long term and notes that the risks to these goals have become more balanced over the past year, though the economic outlook remains uncertain and inflation risks are closely monitored.
To support these goals, the Fed decided to keep the federal funds rate at 5.25-5.5 percent. Any adjustments to this rate will be based on careful assessment of incoming data, the evolving economic outlook, and the balance of risks. The Fed does not anticipate lowering the rate until it is confident that inflation is moving sustainably towards the 2 percent target. Additionally, the Fed will continue to reduce its holdings of Treasury securities, agency debt, and agency mortgage-backed securities, reaffirming its commitment to achieving the 2 percent inflation objective.
The Fed will continuously monitor various factors to determine the appropriate stance of monetary policy, including labour market conditions, inflation pressures, inflation expectations, and financial and international developments. The Fed is prepared to adjust its monetary policy as necessary if new risks threaten its goals of maximum employment and stable inflation.
Federal Funds Dot Plot
Federal Funds Target Rate
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