Experiential Wealth

FOMC May 2017 Press Release Language Changes

May 4, 2017 | FOMC, Individuals, Institutions


  • Economic activity slowed but expect this to be transitory (change)
  • Labor market continues to strengthen with unemployment rate declining (no change)
  • Household spending rose modestly (no change)
  • Business fixed investment firmed (nochange)
  • Inflation has increased and is moving closer to 2% (no change)
  • Near term risks to the economic outlook appear balanced (no change)
  • Unanimous decision to hold rates unchanged (change)
  • Bottom Line:  the slowing growth and decline in inflation are both deemed transitory or temporary and that the 2% inflation target remains the base case.  The FOMC is in a holding pattern and path to normalization remains data dependent (no change)

[Using the FOMC March 15, 2017, Press Release as the base document, the May 3, 2017, Press Release changes are highlighted in the form of deletions (strike through) or insertions (in bold).]

Release Date: March 15 May 3, 2017

For release at 2:00 p.m. EDT

Information received since the Federal Open Market Committee met in February March indicates that the labor market has continued to strengthen and that even as growth in economic activity has continued to expand at a moderate pace slowed. Job gains remained were solid, on average, in recent months, and the unemployment rate was little changed in recent months declined. Household spending has continued to rise moderately while business rose only modestly, but the fundamentals underpinning the continued growth of consumption remained solid.  Business fixed investment appears to have firmed somewhat. Inflation has increased in recent quarters, moving measured on a 12-month basis recently has been running close to the Committee’s 2 percent longer-run objective;. eExcluding energy and food, consumer prices, declined in March and inflation was little changed and continued to run somewhat below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects views the slowing in growth the first quarter as likely to be transitory and continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, labor market conditions will strengthen somewhat further, and inflation will stabilize around 2 percent over the medium term. Near-term risks to the economic outlook appear roughly balanced. The Committee continues to closely monitor inflation indicators and global economic and financial developments.

In view of realized and expected labor market conditions and inflation, the Committee decided to raise maintain the target range for the federal funds rate to at 3/4 to 1 percent. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. he Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction, and it anticipates doing so until normalization of the level of the federal funds rate is well under way. This policy, by keeping the Committee’s holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.

Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Charles L. Evans; Stanley Fischer; Patrick Harker; Robert S. Kaplan; Neel Kashkari; and Jerome H. Powell; and Daniel K. Tarullo.

Source: The Federal Reserve