- Economic activity expansion is moderate.
- Housing spending and business fixed investment has been increasing modestly.
- Net export has been soft.
- Underutilization of labor resources has diminished.
- Inflation continues to run below the long-run objective even though long-term expectation remains stable.
- Recent global economic and financial developments may restrain economic activity somewhat and places downward pressure on short-term inflation.
- Risks to the outlook for economic activity and the labor market as nearly balanced but is monitoring development abroad.
- Monitoring global economic and financial developments
- Even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.
- Bottom Line: Anticipates that it will be appropriate to raise the target range for the federal funds rate when there is further improvement in the labor market and with reasonably confident that inflation will move back to its 2 percent objective over the medium term.
[Using the July 29, 2015 FOMC, Press Release as the base document, the September 17, 2015 Press Release changes are highlighted in the form of deletions (strike out) or insertions (in bold).]
September 17, 2015
For immediate release
Information received since the Federal Open Market Committee met in July suggests June indicates that economic activity is has been expanding moderately in recent months. Growth in household at a moderate pace. Household spending and business fixed investment have been increasing moderately, has been moderate and the housing sector shown additional improvement has improved further; however, business fixed investment and net exports stayed have been soft. The labor market continued to improve, with solid job gains and declining unemployment. On balance, a range of labor market indicators suggests show that underutilization of labor resources has diminished since early this year. Inflation has continued to run below the Committee’s longer-run objective, partly reflecting earlier declines in energy prices and decreasing in prices of non-energy imports. Market-based measures of inflation compensation moved lower remain low; survey‑based measures of longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term. Nonetheless, the Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators continuing to move toward levels the Committee judges consistent with its dual mandate. The Committee continues to see the risks to the outlook for economic activity and the labor market as nearly balanced but is monitoring development abroad. Inflation is anticipated to remain near its recent low level in the near term, but the Committee expects inflation to rise gradually toward 2 percent over the medium term as the labor market improves further and the transitory effects of earlier declines in energy and import prices dissipate. The Committee continues to monitor inflation developments closely.
To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress–both realized and expected–toward 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. The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.
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. This policy, by keeping the Committee’s holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.
When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.
Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Charles L. Evans; Stanley Fischer; Jeffrey M. Lacker; Dennis P. Lockhart; Jerome H. Powell; Daniel K. Tarullo; and John C. Williams. Voting against the action was Jeffrey M. Lacker, who preferred to raise the target range for the federal funds rate by 25 basis points at this meeting.
Source: Federal Reserve