FOMC statement from Sept 19-20 meeting

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:

Federal Reserve Chairman Janet Yellen speaks during a news conference after a two-day Federal Open Markets Committee (FOMC) policy meeting, in Washington, U.S., September 20, 2017. REUTERS/Joshua Roberts

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


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.