The US Federal Reserve kept the target range for the federal funds rate at 2-2.25% today, and gave no indication when it might next change the rate.
Fed chair Jerome Powell said in his summary of the state of the market:
“Information received since the Federal open market committee met in September indicates that the labour market has continued to strengthen and that economic activity has been rising at a strong rate.
“Job gains have been strong, on average, in recent months, and the unemployment rate has declined. 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 & inflation for items other than food & energy remain near 2%. Indicators of longer-term inflation expectations are little changed, on balance.
“Consistent with its statutory mandate, the committee seeks to foster maximum employment & price stability. The committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labour market conditions and inflation near the committee’s symmetric 2% objective over the medium term. Risks to the economic outlook appear roughly balanced.
“In view of realised & expected labour market conditions & inflation, the committee decided to maintain the target range for the federal funds rate at 2-2.25%.
“In determining the timing & size of future adjustments to the target range for the federal funds rate, the committee will assess realised & expected economic conditions relative to its maximum employment objective & its symmetric 2% inflation objective. This assessment will take into account a wide range of information, including measures of labour market conditions, indicators of inflation pressures & inflation expectations, and readings on financial & international developments.”
Attribution: Bank release.