Publication date: January 31, 2018.
The information obtained during the period after the December meeting of the Federal open market Committee indicates that the labor market continued to strengthen and that economic activity increased at a significant rate. Employment growth, household expenditure and investment of entrepreneurs in the basic capital was substantial, and the unemployment rate remained low. Measured on a 12-month basis, both indicators of inflation – the head and excluding food and energy prices continued to fluctuate below 2%. Market indicators assessing inflationary trim, increased in recent months, but remain low; the indicators based on studies of long-term inflation expectations, in General, have not changed.
In accordance with the terms of reference the Committee was seeking support to ensure maximum employment and price stability. The Committee believes that, against the background of gradual adjustment of the attitude of monetary policy, economic activity will expand at a moderate pace, and conditions in the labor market will remain strong. Inflation measured on a 12-month basis, is expected to rise this year and stabiliziruemost close to the target level of the Committee in 2% in the medium term. Short-term risks relating to economic prospects, seem mostly balanced, but the Committee will continue to monitor closely the development of situation with inflation.
In the light of the realized and expected conditions in the labor market and inflation, the Committee decided to keep the target range for the Federal funds rate at 1.25 – 1.50%. Attitude of monetary policy remains accommodative, thereby supporting a strong labour market and sustainable return to 2% inflation.
In the process of determining the timing and size of future adjustments to the target range for the Federal funds rate, the Committee will evaluate the achieved and expected economic conditions, comparing them with its goals for maximum employment and inflation of 2%. This assessment will consider a wide range of information, including indicators of conditions in the labour market, indicators of inflationary pressures and inflation expectations and data on the development of financial and international situation. The Committee will closely monitor the actual and expected development of the inflation is relative to its symmetrical inflation target. The Committee expects that economic conditions will evolve in a way that will ensure further gradual increase in the Federal funds rate; the Federal funds rate will probably remain for some time below those levels which are expected to prevail in the long run. However, the actual path of the Federal funds rate will depend on economic forecasts, illuminated incoming data.
Voting for the Committee’s decision on monetary policy: Janet Yellen, the fed Chairman; William Dudley, Vice Chairman of the Federal reserve; Thomas barkin; Raphael Bostic; Lael Brainard; Loretta Mester; Jerome Powell; Randall Quarless; and John Williams.