The Fed kept rates unchanged with 2 dissenters – Michelle Bowman and Christopher Bowman.
Federal Reserve issues FOMC statement
For release at 2:00 p.m. EDT
Although swings in net exports continue to affect the data, recent indicators suggest that growth of economic activity moderated in the first half of the year. The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate.
In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent. In considering the extent and timing of additional 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 will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to supporting maximum employment and 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; Michael S. Barr; Susan M. Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N. Jefferson; Alberto G. Musalem; and Jeffrey R. Schmid. Voting against this action were Michelle W. Bowman and Christopher J. Waller, who preferred to lower the target range for the federal funds rate by 1/4 percentage point at this meeting. Absent and not voting was Adriana D. Kugler.
Before the decision, the market was pricing in 17 basis points of cuts for September and a cut fully price in for October.
Stocks before the decision:
- S&P index up 15.28 points or 0.24% at 6386.18
- NASDAQ index up 98 points or 0.47% at 21197.45
- 10 year yield 4.352%.
The current market is showing:
- S&P index up 13.63 points or 0.21% at 6384.34
- NASDAQ index up 87.67 points or 0.42% at 21186
- 10 year yield 4.344%, +1.6 basis
The Fed is divided but the board is still on the Fed Chair’s side. The Fed press conference begins at 2:30 PM ET:
This article was written by Greg Michalowski at investinglive.com.