FOMC Statement:
Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have remained strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated. In recent months, there has been modest further progress toward the Committee's 2 percent inflation objective.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year. The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks.
In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to returning inflation to its 2 percent objective.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Michael S. Barr; Raphael W. Bostic; Michelle W. Bowman; Lisa D. Cook; Mary C. Daly; Philip N. Jefferson; Adriana D. Kugler; Loretta J. Mester; and Christopher J. Waller.
emphasis added
Here are the
projections. Since the last projections were released,
the economy has performed close to FOMC expectations.
In March, the FOMC participants’ midpoint of the target level for the federal funds rate was around 4.75% at the end of 2024. The FOMC participants’ midpoint of the target range is now at 5.125% at the end of 2024.
Market participants expect the target range to be between 4.75% and 5.0% at the end of 2024.
The BEA's
second estimate for Q1 GDP showed real growth at 1.3% annualized. Early estimates for Q2 GDP are around 2% to 3% annualized, and
projections for Q4 2024 were revised down slightly.
| GDP projections of Federal Reserve Governors and Reserve Bank presidents, Change in Real GDP1 |
|---|
| Projection Date | 2024 | 2025 | 2026 |
|---|
| June 2024 | 1.9 to 2.3 | 1.8 to 2.2 | 1.8 to 2.1 |
| Mar 2024 | 2.0 to 2.4 | 1.9 to 2.3 | 1.8 to 2.1 |
1 Projections of change in real GDP and inflation are from the fourth quarter of the previous year to the fourth quarter of the year indicated.
The
unemployment rate was at 4.0% in April and the projections for Q4 2024 were
revised up slightly.
| Unemployment projections of Federal Reserve Governors and Reserve Bank presidents, Unemployment Rate2 |
|---|
| Projection Date | 2024 | 2025 | 2026 |
|---|
| June 2024 | 3.9 to 4.2 | 3.9 to 4.3 | 3.9 to 4.3 |
| Mar 2024 | 3.9 to 4.1 | 3.9 to 4.2 | 3.9 to 4.3 |
2 Projections for the unemployment rate are for the average civilian unemployment rate in the fourth quarter of the year indicated.
As of April 2024, PCE inflation increased 2.7 percent year-over-year (YoY). The projections for PCE inflation were revised up.
| Inflation projections of Federal Reserve Governors and Reserve Bank presidents, PCE Inflation1 |
|---|
| Projection Date | 2024 | 2025 | 2026 |
|---|
| June 2024 | 2.5 to 2.9 | 2.2 to 2.4 | 2.0 to 2.1 |
| Mar 2024 | 2.3 to 2.7 | 2.1 to 2.2 | 2.0 to 2.1 |
PCE core inflation increased 2.8 percent YoY in April. The projections for core PCE inflation were revised up.
| Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents, Core Inflation1 |
|---|
| Projection Date | 2024 | 2025 | 2026 |
|---|
| June 2024 | 2.8 to 3.0 | 2.3 to 2.4 | 2.0 to 2.1 |
| Mar 2024 | 2.5 to 2.8 | 2.1 to 2.3 | 2.0 to 2.1 |
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