Following is the full text of the statement released by the Federal Reserve’s Federal Open Market Committee on Wednesday following a two-day meeting:
Information received since the Federal Open Market Committee met in July
indicates that the labor market has continued to strengthen and that economic
activity has been rising moderately so far this year. Job gains have remained
solid in recent months, and the unemployment rate has stayed low. Household
spending has been expanding at a moderate rate, and growth in business fixed
investment has picked up in recent quarters.
On a 12-month basis, overall inflation and the measure excluding food and
energy prices have declined this year and are running below 2 percent.
Market-based measures of inflation compensation remain low; survey-based
measures of longer-term inflation expectations are little changed, on
balance.
Consistent with its statutory mandate, the Committee seeks to foster maximum
employment and price stability. Hurricanes Harvey, Irma, and Maria have
devastated many communities, inflicting severe hardship. Storm-related
disruptions and rebuilding will affect economic activity in the near term,
but past experience suggests that the storms are unlikely to materially
alter the course of the national economy over the medium term.
Consequently, the Committee continues to expect that, with gradual
adjustments in the stance of monetary policy, economic activity will
expand at a moderate pace, and labor market conditions will strengthen
somewhat further. Higher prices for gasoline and some other items in the
aftermath of the hurricanes will likely boost inflation temporarily; apart
from that effect, inflation on a 12-month basis is expected to remain
somewhat below 2 percent in the near term but to stabilize around the
Committee’s 2 percent objective over the medium term. Near-term risks to
the economic outlook appear roughly balanced, but the Committee is
monitoring inflation developments closely.
In view of realized and expected labor market conditions and inflation, the
Committee decided to maintain the target range for the federal funds rate at 1
to 1-1/4 percent. The stance of monetary policy remains accommodative,
thereby supporting some further strengthening in labor market conditions
and a sustained return to 2 percent inflation.
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 objectives of maximum employment and 2
percent inflation. 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. The Committee will carefully
monitor actual and expected inflation developments relative to its symmetric
inflation goal. The Committee expects that economic conditions will
evolve in a manner that will warrant gradual increases in the federal
funds rate; the federal funds rate is likely to remain, for some time,
below levels that are expected to prevail in the longer run.
However, the actual path of the federal funds rate will depend on the economic
outlook as informed by incoming data.
In October, the Committee will initiate the balance sheet normalization
program described in the June 2017 Addendum to the Committee’s Policy
Normalization Principles and Plans.
Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair;
William C. Dudley, Vice Chairman; Lael Brainard; Charles L. Evans; Stanley Fischer; Patrick Harker; robert S. Kaplan: Neel Kashkari; and Jerome H. Powell.