WASHINGTON–Although debate has increased recently over whether it should do so, as expected, the Fed has moved to raise interest rates. The Federal Open Market Committee (FOMC) voted to raise the target range for the federal funds rate to 2%-2.25% to 2.25%-2.50%.
“Information received since the Federal Open Market Committee met in November indicates that the labor market has continued to strengthen and that economic activity has been rising at a strong rate,” said the FOMC in a statement following today’s meeting. “Job gains have been strong, on average, in recent months, and the unemployment rate has remained low. Household spending has continued to grow strongly, while growth of business fixed investment has moderated from its rapid pace earlier in the year. On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2%. Indicators of longer-term inflation expectations are little changed, on balance.”
Fed watchers have been particularly interested in what the FOMC would signal regarding future interest rates, with many analysts predicting it will raise rates twice in 2019, but President Trump criticizing the Fed for any rate increases, saying they are slowing economic growth.
In today’s statement, the Fed offered no new tea leaves to read, issuing a statement it has in the past 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 labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.”
Voting for the FOMC monetary policy action were: Jerome H. Powell, Chairman; John C. Williams, Vice Chairman; Thomas I. Barkin; Raphael W. Bostic; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Mary C. Daly; Loretta J. Mester; and Randal K. Quarles.
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