Release Date: September 17, 2015
For immediate release
Information received since the Federal Open Market Committee met
in July suggests that economic activity is expanding at a moderate pace.
Household spending and business fixed investment have been increasing
moderately, and the housing sector has improved further; however, net
exports have been soft. The labor market continued to improve, with
solid job gains and declining unemployment. On balance, labor market
indicators 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 declines in energy
prices and in prices of non-energy imports. Market-based measures of
inflation compensation moved lower; 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 developments 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 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; 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.
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