The Federal Open Market Committee decided not to raise interest rates, but the new “dot plot” cut its median expectation for fed funds rate to 0.90% in December from 1.40%.
A 0.90% fed funds rate would mean two more rate hikes this year.
The mean fed funds rate at the end of the year dropped to 1.022% from 1.287%.
The Fed said inflation picked up recently, but it’s still not at the 2% goal. “Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months,” the statement said.
Also, the statement said the global economy and developments abroad “continue to pose a risk.”
No mention was made to balance of risks.
Full story to follow.
Economic expansion was termed “moderate,” with “additional strengthening of the labor market.”
Only Federal Reserve Bank of Kansas City President Esther George opposed, according to the statement, with a desire “to raise the target range for the federal funds rate to ½ to 3/4 percent.”
