- Economic activity expanded moderately (no change)
- Labor market continues to strengthen with solid job gains (no change)
- Household spending continues to expand (no change)
- Business fixed investment continues to expand (no change)
- Inflation and core inflation have declined (no change)
- Near term risks to the economic outlook appear balanced (no change)
- Maintain federal fund rate target range (change)
- Begin balance sheet normalization from “this year” to “relatively soon” (change)
Bottom Line: The economy is steady-as-it-goes even though inflation continues to be below expectation. Without a rate hike, the FOMC is in a wait-and-see mode for more incoming data before the September meeting. At the same time, the FOMC is guiding expectations on balance sheet normalization to be even sooner. Expect an update on global central bank policies during the August Economic Symposium sponsored by the Federal Reserve Bank of Kansas City. This year’s theme is Fostering a Dynamic Global Economy.
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