The Federal Open Market Committee of the Federal Reserve announced that it raised the target federal funds rate to a range of 2.00 percent to 2.25 percent. This was the third consecutive increase in the Fed’s key interest rate and was the eighth time the Fed raised its key interest rate since 2015.
In its customary post-meeting statement, Committee members cited strong economic conditions and continued labor market growth coupled with historically low unemployment rates as a basis for raising the federal funds interest rate.
Fed Cites Steady Inflation, Healthy Household And Business Spending
Further economic conditions cited in the FOMC statement were steady inflation, which has held close to the Fed’s objective of two percent for a year. Projections on long-term inflation were “little changed” according to the statement.
FOMC’s statement explained how committee members make decisions about the target range for the federal funds rate. The Federal Reserve must make decisions based on its legislative mandate of achieving and maintaining maximum employment and an inflation rate at or near two percent.
The FOMC also considers measures of economic and labor conditions, pressures on inflation and projections on inflation. Committee members keep up-to-date on domestic and global economic developments.
After the FOMC statement was released, Fed Chair Jerome Powell gave a press conference.
Fed Chair: Economy Strengthening Without Need Of Fed Accommodation
Federal Reserve Chair Jerome Powell expressed confidence in current economic conditions and said that future rate hikes would help maintain the Fed’s goals and promote healthy economic growth. Mr. Powell said that future meetings of the Federal Open Market Committee would be guided by asking and answering the question of whether current monetary policy is set to achieve FOMC goals. Analysts interpreted Chair Powell’s comments as indicating that current economic conditions are as good as could be expected and that the Fed’s monetary policy decisions are working as planned.