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Confira a decisão do Fomc na íntegra (em inglês)


São Paulo, 14/12 (Enfoque) – Information received since the Federal Open Market Committee met in November indicates that the labor market has continued to strengthen and that economic activity has been expanding at a moderate pace since mid-year. Job gains have been solid in recent months and the unemployment rate has declined. Household spending has been rising moderately but business fixed investment has remained soft. Inflation has increased since earlier this year but is still below the Committee’s 2 percent longer-run objective, partly reflecting earlier declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation have moved up considerably but still are low; most survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will strengthen somewhat further. Inflation is expected to rise to 2 percent over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further. 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 the target range for the federal funds rate to 1/2 to 3/4 percent. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a 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. In light of the current shortfall of inflation from 2 percent, the Committee will carefully monitor actual and expected progress toward its inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant only 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; James Bullard; Stanley Fischer; Esther L. George; Loretta J. Mester; Jerome H. Powell; Eric Rosengren; and Daniel K. Tarullo.

(por Gabriel Codas)


Fonte: Enfoque
Publicado em: 14/12/2016 17:06:00

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Confira a decisão do Fomc na íntegra (em inglês)


São Paulo, 27/07 (Enfoque) –

Information received since the Federal Open Market Committee met in June indicates that the labor market strengthened and that economic activity has been expanding at a moderate rate. Job gains were strong in June following weak growth in May. On balance, payrolls and other labor market indicators point to some increase in labor utilization in recent months. Household spending has been growing strongly but business fixed investment has been soft. Inflation has continued to run below the Committee’s 2 percent longer-run objective, partly reflecting earlier declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation remain low; most survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee currently expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market indicators will strengthen. Inflation is expected to remain low in the near term, in part because of earlier declines in energy prices, but to rise to 2 percent over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further. Near-term risks to the economic outlook have diminished. The Committee continues to closely monitor inflation indicators and global economic and financial developments.

Against this backdrop, the Committee decided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a 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. In light of the current shortfall of inflation from 2 percent, the Committee will carefully monitor actual and expected progress toward its inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant only 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; James Bullard; Stanley Fischer; Loretta J. Mester; Jerome H. Powell; Eric Rosengren; and Daniel K. Tarullo. Voting against the action was Esther L. George, who preferred at this meeting to raise the target range for the federal funds rate to 1/2 to 3/4 percent.

(por Gabriel Codas)


Fonte: Enfoque
Publicado em: 27/07/2016 15:49:56

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Confira a decisão do Fomc na íntegra (em inglês)


São Paulo, 16/12 (Enfoque) –

Information received since the Federal Open Market Committee met in October suggests that economic activity has been expanding at a moderate pace. Household spending and business fixed investment have been increasing at solid rates in recent months, and the housing sector has improved further; however, net exports have been soft. A range of recent labor market indicators, including ongoing job gains and declining unemployment, shows further improvement and confirms that underutilization of labor resources has diminished appreciably since early this year. Inflation has continued to run below the Committee’s 2 percent longer-run objective, partly reflecting declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation remain low; some survey-based measures of longer-term inflation expectations have edged down.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee currently expects that, with gradual adjustments in the stance of monetary policy, economic activity will continue to expand at a moderate pace and labor market indicators will continue to strengthen. Overall, taking into account domestic and international developments, the Committee sees the risks to the outlook for both economic activity and the labor market as balanced. Inflation is expected to rise to 2 percent over the medium term as the transitory effects of declines in energy and import prices dissipate and the labor market strengthens further. The Committee continues to monitor inflation developments closely.

The Committee judges that there has been considerable improvement in labor market conditions this year, and it is reasonably confident that inflation will rise, over the medium term, to its 2 percent objective. Given the economic outlook, and recognizing the time it takes for policy actions to affect future economic outcomes, the Committee decided to raise the target range for the federal funds rate to 1/4 to 1/2 percent. The stance of monetary policy remains accommodative after this increase, thereby supporting further improvement in labor market conditions and a 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. In light of the current shortfall of inflation from 2 percent, the Committee will carefully monitor actual and expected progress toward its inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant only 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; Jeffrey M. Lacker; Dennis P. Lockhart; Jerome H. Powell; Daniel K. Tarullo; and John C. Williams.

(por Gabriel Codas)


Fonte: Enfoque
Publicado em: 16/12/2015 17:01:25

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Confira a decisão do Fomc na íntegra (em inglês)


São Paulo, 28/10 (Enfoque) –

Information received since the Federal Open Market Committee met in September suggests that economic activity has been expanding at a moderate pace. Household spending and business fixed investment have been increasing at solid rates in recent months, and the housing sector has improved further; however, net exports have been soft. The pace of job gains slowed and the unemployment rate held steady. Nonetheless, labor market indicators, on balance, 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 slightly 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. 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 global economic and financial developments. 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 whether it will be appropriate to raise the target range at its next meeting, 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.

(por Gabriel Codas)


Fonte: Enfoque
Publicado em: 28/10/2015 16:35:08

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Confira a decisão do Fomc na íntegra (em inglês)


São Paulo, 17/09 (Enfoque) –

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.

(por Gabriel Codas)


Fonte: Enfoque
Publicado em: 17/09/2015 15:08:44

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Confira a decisão do Fomc na íntegra (em inglês)


São Paulo, 19/08 (Enfoque) – A meeting of the Federal Open Market Committee was held in the offices of the Board of Governors of the Federal Reserve System in Washington, D.C., on Tuesday, July 28, 2015, at 10:30 a.m. and continued on Wednesday, July 29, 2015, at 9:00 a.m.
PRESENT:
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
John C. Williams

James Bullard, Esther L. George, Loretta J. Mester, Eric Rosengren, and Michael Strine, Alternate Members of the Federal Open Market Committee

Patrick Harker and Narayana Kocherlakota, Presidents of the Federal Reserve Banks of Philadelphia and Minneapolis, respectively

Helen E. Holcomb, First Vice President, Federal Reserve Bank of Dallas

Brian F. Madigan, Secretary

Matthew M. Luecke, Deputy Secretary

David W. Skidmore, Assistant Secretary

Michelle A. Smith, Assistant Secretary

Scott G. Alvarez, General Counsel

Thomas C. Baxter, Deputy General Counsel

Steven B. Kamin, Economist

Thomas Laubach, Economist

David W. Wilcox, Economist

David Altig, Thomas A. Connors, Michael P. Leahy, William R. Nelson, Daniel G. Sullivan, and William Wascher, Associate Economists

Simon Potter, Manager, System Open Market Account

Lorie K. Logan, Deputy Manager, System Open Market Account

Robert deV. Frierson,1 Secretary of the Board, Office of the Secretary, Board of Governors

Michael S. Gibson, Director, Division of Banking Supervision and Regulation, Board of Governors

Nellie Liang, Director, Office of Financial Stability Policy and Research, Board of Governors

James A. Clouse and Stephen A. Meyer, Deputy Directors, Division of Monetary Affairs, Board of Governors

Andreas Lehnert, Deputy Director, Office of Financial Stability Policy and Research, Board of Governors

Andrew Figura, David Reifschneider, and Stacey Tevlin, Special Advisers to the Board, Office of Board Members, Board of Governors

Trevor A. Reeve, Special Adviser to the Chair, Office of Board Members, Board of Governors

Linda Robertson, Assistant to the Board, Office of Board Members, Board of Governors

David E. Lebow, Senior Associate Director, Division of Research and Statistics, Board of Governors

Michael T. Kiley, Senior Adviser, Division of Research and Statistics, and Senior Associate Director, Office of Financial Stability Policy and Research, Board of Governors

Ellen E. Meade2 and Joyce K. Zickler, Senior Advisers, Division of Monetary Affairs, Board of Governors; Jeremy B. Rudd, Senior Adviser, Division of Research and Statistics, Board of Governors

Fabio M. Natalucci,3 Associate Director, Division of Monetary Affairs, Board of Governors

Jane E. Ihrig,2 Deputy Associate Director, Division of Monetary Affairs, Board of Governors

Glenn Follette and Steven A. Sharpe, Assistant Directors, Division of Research and Statistics, Board of Governors; Elizabeth Klee, Assistant Director, Division of Monetary Affairs, Board of Governors

Burcu Duygan-Bump, Adviser, Division of Monetary Affairs, Board of Governors

Penelope A. Beattie,1 Assistant to the Secretary, Office of the Secretary, Board of Governors

Dana L. Burnett, Section Chief, Division of Monetary Affairs, Board of Governors

Katie Ross,1 Manager, Office of the Secretary, Board of Governors

David H. Small, Project Manager, Division of Monetary Affairs, Board of Governors

Etienne Gagnon, Senior Economist, Division of Monetary Affairs, Board of Governors

Marie Gooding, First Vice President, Federal Reserve Bank of Atlanta

Jeff Fuhrer, Executive Vice President, Federal Reserve Bank of Boston

Troy Davig, Michael Dotsey, Evan F. Koenig, Julie Ann Remache, Samuel Schulhofer-Wohl, and Ellis W. Tallman, Senior Vice Presidents, Federal Reserve Banks of Kansas City, Philadelphia, Dallas, New York, Minneapolis, and Cleveland, respectively

Todd E. Clark,2 Aysegül Sahin, Mark Spiegel, and Stephen Williamson, Vice Presidents, Federal Reserve Banks of Cleveland, New York, San Francisco, and St. Louis, respectively

Matthew Nemeth,4 Assistant Vice President, Federal Reserve Bank of New York

Robert L. Hetzel and Carlo Rosa, Senior Economists, Federal Reserve Banks of Richmond and New York, respectively

In the agenda for this meeting, it was reported that Michael Strine had been elected an alternate member of the Federal Open Market Committee and that he had executed his oath of office.

Developments in Financial Markets, Open Market Operations, and Policy Normalization
In a joint session of the Federal Open Market Committee (FOMC) and the Board of Governors of the Federal Reserve System, the manager of the System Open Market Account (SOMA) reported on developments in domestic and foreign financial markets. The deputy manager followed with a discussion of System open market operations conducted by the Open Market Desk during the period since the Committee met on June 16-17. The Desk’s overnight reverse repurchase agreement (ON RRP) operations continued to provide a soft floor for money market interest rates. The deputy manager also updated the Committee on plans for tests of the Term Deposit Facility in August and of term RRPs at the end of the third quarter.

The staff next summarized some of the recent steps the System had taken to prepare further for the process of normalization of monetary policy. The staff also proposed that future changes in the FOMC’s target federal funds rate range as well as associated changes in related administered interest rates–including the interest rates on excess and required reserves, the ON RRP rate, and the primary credit rate–all be effective on the day after the Committee’s policy decision. Making all such rate changes effective on the same day would enhance the clarity of Federal Reserve communications. It would also help promote federal funds trading within the new target range, partly by enabling the Desk to conduct ON RRP operations at the new rate specified by the Committee on the same day that the new target range becomes effective. Participants supported the staff proposal.

By unanimous vote, the Committee ratified the Desk’s domestic transactions over the intermeeting period. There were no intervention operations in foreign currencies for the System’s account over the intermeeting period.

The Board meeting concluded at the end of the discussion of financial markets, open market operations, and policy normalization issues.

System Open Market Account Reinvestment Policy
In the Policy Normalization Principles and Plans adopted at its September 16-17, 2014 meeting, the Committee indicated that it expects to cease or commence phasing out reinvestments of principal on securities held in the SOMA after it begins increasing the target range for the federal funds rate; the timing of this decision will depend on how economic and financial conditions and the economic outlook evolve. A staff briefing at this meeting provided background on alternative strategies the Committee could employ with respect to reinvestments. These strategies included either characterizing qualitatively or specifying numerically the economic conditions under which reinvestments would cease, or establishing a date or time interval following the initial firming of the federal funds rate for the new policy on reinvestments to begin. The briefing also noted that the Committee could phase out reinvestments gradually or end reinvestments all at once.

In their discussion, most participants expressed a preference that the timing of the cessation of reinvestments be based on a qualitative assessment of economic conditions and the outlook. Participants generally favored continuing reinvestments during the early stages of normalization, initially using only increases in the target range for the federal funds rate to reduce monetary policy accommodation. This approach was viewed as consistent with the Committee’s plans to rely on changes in the target range for the federal funds rate as the primary indicator of the stance of monetary policy. Most participants thought that it might be best either to wind down reinvestments or to manage them in a manner that would smooth the decline in the balance sheet in a predictable way. However, some participants supported ceasing reinvestments all at once at the appropriate time. Participants indicated a range of views on various issues specific to agency mortgage-backed securities (MBS) and Treasury markets. Using the same strategy for both agency MBS and Treasury maturities was viewed as simpler to communicate, but a number of market-specific considerations might suggest employing different strategies for each asset class. No decisions regarding the Committee’s strategy for ceasing or phasing out reinvestments were made at this meeting. Participants requested additional analysis from the staff related to alternative approaches to halting or phasing out reinvestments, including consideration of the possible market effects, and agreed that it would be helpful to continue to discuss these issues at upcoming meetings.

Potential Enhancements to the Summary of Economic Projections
Next, participants considered a proposal by the subcommittee on communications for a few modest modifications to the Summary of Economic Projections (SEP) that could provide further information to the public. A staff briefing reviewed the subcommittee’s proposal for publishing median values of the projections starting at the time of the September meeting, noting that public commentary frequently focuses on the midpoint of the central tendency of the projections and that medians would provide a more robust summary measure of the distribution of participants’ views. The subcommittee also proposed the removal of the histogram depicting participants’ preferred year of liftoff from the SEP exhibits at the time that the Committee decides to commence the normalization process or in the first SEP thereafter. In their comments, participants noted that the inclusion of medians would provide an additional useful summary statistic of participants’ perspectives; however, they also emphasized that the medians would not represent a collective view or Committee forecast. Participants unanimously supported the addition of medians for all variables–economic growth, the unemployment rate, total and core inflation, and individual assessments of the projected appropriate federal funds rate–to the September SEP and the removal of the histogram of preferred liftoff years following the commencement of normalization. The briefing also raised the possibility of eventually including graphs in the SEP that would illustrate the uncertainty that attends participants’ macroeconomic projections, but noted that further work was needed before a specific proposal could be presented to the Committee. The Chair asked the subcommittee on communications to continue to investigate the possibility of incorporating a graphical depiction of uncertainty into the SEP.

Staff Review of the Economic Situation
The information reviewed for the July 28-29 meeting suggested that real gross domestic product (GDP) rose moderately in the second quarter after edging down in the first quarter, and that labor market conditions continued to improve. Consumer price inflation continued to run below the FOMC’s longer-run objective of 2 percent, restrained by earlier declines in energy prices and further decreases in non-energy import prices. Survey measures of longer-term inflation expectations remained stable, while market-based measures of inflation compensation were still low.

Total nonfarm payroll employment continued to expand at a solid pace in June. The unemployment rate declined to 5.3 percent, its lowest reading so far this year, and the share of workers employed part time edged lower; however, the labor force participation rate and the employment-to-population ratio both moved down. The rate of private-sector job openings was unchanged in May at a high level, and the rates of hiring and quits were also little changed. On balance, labor market indicators suggested that underutilization of labor resources had diminished since early this year.

After declining for five consecutive months, industrial production rose in June, partly reflecting an increase in the output of mines. Nonetheless, for the second quarter as a whole, mining output contracted sharply and manufacturing production rose only modestly; both sectors were weak over the first half of the year, likely reflecting the continuing effects of earlier increases in the foreign exchange value of the dollar and lower crude oil prices. Automakers’ assembly schedules pointed to a solid gain in light motor vehicle production in the third quarter, but broader indicators of manufacturing production, including readings on new orders from national and regional manufacturing surveys, generally suggested only modest increases in factory output in the coming months.

Real personal consumption expenditures (PCE) appeared to have risen at a solid pace in the second quarter. The components of the nominal retail sales data used by the Bureau of Economic Analysis to construct its estimate of PCE edged down in June, but the decline for that group of components followed a strong reading in May. Similarly, light vehicle sales in June partly reversed a large increase in May but remained robust. Among the factors that influence household spending, real disposable income rose in May and gains in households’ net worth were supported by further advances in home values. Moreover, consumer sentiment in the University of Michigan Surveys of Consumers in early July remained near its highest level since before the most recent recession.

Activity in the housing sector improved somewhat in recent months but remained slow. Starts of new single-family houses declined in June but rose for the quarter as a whole, and the level of permit issuance pointed to increases in starts in subsequent months. In the multifamily sector, starts and permits increased sharply in June, likely reflecting in large part a pull-forward of activity due to an expiring tax credit in New York City. Sales of new homes declined in June; in contrast, existing home sales increased and pending home sales were at a level consistent with little change in closed sales over the next couple of months.

Real private expenditures for business equipment and intellectual property products appeared to rise at a modest rate in the second quarter. Nominal shipments of nondefense capital goods excluding aircraft were little changed in June. Forward-looking indicators, such as new orders for these capital goods along with national and regional surveys of business conditions, pointed to further modest increases in business equipment spending in the near term. Real spending for nonresidential structures excluding drilling and mining appeared to rise solidly in the second quarter, as firms’ nominal outlays for such structures increased at a robust pace again in May. In contrast, real business spending for drilling and mining structures likely fell sharply last quarter, consistent with the drop in the number of oil rigs in operation. However, the rig count appeared to be bottoming out in recent weeks.

Nominal federal spending data through June indicated that real federal government purchases likely decreased in the second quarter. However, real state and local government purchases appeared to have risen last quarter, as nominal construction spending rebounded following a decline in the first quarter and payrolls for these governments were little changed.

After narrowing in April, the U.S. international trade deficit widened in May, as exports decreased more than imports. The decrease in exports largely reflected a fall in aircraft shipments. The decline in imports was driven by reductions in imports of capital goods, particularly computers and oilfield equipment. By contrast, imports of automotive products increased to a record level. While real net exports made a large negative contribution to the change in real GDP in the first quarter of 2015, the available trade data indicated that the drag on GDP growth exerted by net exports in the second quarter was considerably smaller.

Total U.S. consumer prices, as measured by the PCE price index, only edged up over the 12 months ending in May, held down primarily by earlier large declines in energy prices. Core PCE inflation, which excludes food and energy prices, was 1-1/4 percent over the same period, restrained in part by declines in the prices of non-energy imports. Over the 12 months ending in June, total consumer prices as measured by the consumer price index (CPI) were little changed, while the core CPI increased 1-3/4 percent. Measures of expected longer-run inflation from a variety of surveys, including the Michigan survey and the Desk’s Survey of Primary Dealers, remained stable. However, market-based measures of inflation compensation were still low, although they were somewhat higher than early in the year. Over the 12 months ending in June, nominal average hourly earnings for all employees increased 2 percent.

Foreign economic growth appeared to remain subdued in the second quarter. In Canada, indicators suggested that low oil prices weighed on investment in the energy sector, and energy production in April was curtailed by wildfires and maintenance shutdowns. Economic activity also weakened in some Latin American countries. By contrast, second-quarter economic growth was strong in China and in the United Kingdom, and euro-area indicators were consistent with continued moderate economic expansion. Headline foreign inflation remained low, importantly reflecting past oil price declines.

Staff Review of the Financial Situation
Financial conditions were affected by developments abroad over the intermeeting period but were little changed on balance. Federal Reserve communications and economic data releases, including the June employment report and retail sales data, put some downward pressure on the path of expected future short-term interest rates. On net, 5-year and 10-year Treasury yields were somewhat lower, measures of inflation compensation over the next 5 years based on Treasury Inflation-Protected Securities declined, equity prices were little changed, and the foreign exchange value of the dollar rose modestly.

The expected path of the federal funds rate moved down following the June FOMC statement and the Chair’s postmeeting press conference. Market participants reportedly saw as notable the downward revisions in the June SEP to FOMC participants’ projections of the appropriate level of the federal funds rate at the end of 2015. Results from the Desk’s July Survey of Primary Dealers and Survey of Market Participants indicated that a majority of respondents to both surveys continued to view the September 2015 meeting as the most likely time for the first increase in the target range for the federal funds rate; however, respondents to both surveys continued to place significant probability on scenarios in which the first increase in the target range occurred at subsequent meetings. As in the June survey, after the initial increase, respondents expected the target range for the federal funds rate to rise only gradually.

Over the intermeeting period, market yields fluctuated in response to news about developments abroad, including Greek debt negotiations. Yields on 5- and 10-year nominal Treasury securities fell somewhat on net. Market-based measures of inflation compensation over the next 5 years moved lower amid a decline in oil prices,whereas inflation compensation 5 to 10 years ahead was relatively stable.

On balance, broad U.S. equity price indexes were little changed over the intermeeting period. Option-implied volatility on the S&P 500 index over the next month increased for a time in response to foreign developments before falling back to the lower end of its range over recent years. Based on reports from about 40 percent of firms in the S&P 500 index, earnings per share in the second quarter were about unchanged or slightly higher than their first-quarter levels. Spreads on 10-year triple-B-rated and speculative-grade corporate bonds over comparable-maturity Treasury securities widened somewhat over the period.

Financing conditions for nonfinancial firms continued to be accommodative. Corporate bond issuance remained strong in the second quarter; issuance of institutional leveraged loans picked up noticeably, likely due in part to tighter loan spreads as compared with the beginning of the year. Commercial and industrial loans on banks’ balance sheets continued to expand.

Financing for commercial real estate (CRE) remained broadly available. CRE loans on banks’ books expanded in the second quarter, consistent with stronger loan demand reported in the July Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS). Issuance of commercial mortgage-backed securities continued to be robust.

According to available measures, residential mortgage lending conditions stayed accommodative for many consumers. However, credit conditions remained tight for riskier borrowers, such as those with low credit scores, undocumented income, or high debt-to-income ratios. Interest rates on 30-year fixed-rate mortgages were little changed, in line with MBS yields and other longer-term interest rates.

Outstanding balances of auto and student loans continued to expand at a robust pace through May. Banks indicated in the July SLOOS that their lending standards for credit card loans had eased somewhat relative to the past few years. However, a number of indicators suggested that terms on credit card loans remained tight, especially for subprime borrowers.

Credit conditions in municipal bond markets were stable over the intermeeting period. Despite the announcement that Puerto Rico might seek to restructure at least part of its debt, spreads on an index of 20-year general obligation municipal bonds over comparable-maturity Treasury securities changed little, and the pace of issuance of long-term municipal bonds remained robust.

After having widened amid concerns about the difficult negotiations between Greece and its creditors, Greek and other peripheral euro-area sovereign spreads narrowed, on net, over the intermeeting period as news emerged of progress toward an agreement. In China, stock prices fell substantially, prompting a number of policy and regulatory actions by Chinese officials to support the stock market. While these developments attracted investor attention, reaction in asset markets outside Greece and China was limited on balance.

Sovereign bond yields and monetary policy expectations in the United Kingdom changed little, on net, over the intermeeting period. By contrast, yields in Canada, New Zealand, Norway, and Sweden decreased following weaker-than-expected macroeconomic data releases and additional monetary policy accommodation. The foreign exchange value of the U.S. dollar increased during the intermeeting period against the currencies of major U.S. trading partners. Stock markets in most advanced foreign economies ended the period higher. Equity prices in emerging market economies, however, generally moved lower on net.

The staff provided its latest report on potential risks to financial stability. The strong capital position of the U.S. banking sector, low to moderate use of leverage elsewhere in the financial system, stability in the level of maturity transformation by financial institutions, and still-moderate rates of borrowing by the private nonfinancial sector were seen as factors supporting overall financial stability. However, rising debt burdens for riskier businesses as well as somewhat elevated valuations and loosening lending standards for many asset classes pointed to some increasing concerns. The effect of financial stresses related to Greece and China on the largest U.S. financial firms was limited to date, perhaps reflecting the relatively strong financial positions and low direct exposures among such firms and a view among market participants that foreign authorities would take actions to stem spillovers.

Staff Economic Outlook
The U.S. economic forecast prepared by the staff for the July FOMC meeting was broadly similar to that prepared for the June FOMC meeting. Real GDP was again expected to increase faster in the second half of this year than in the first half and to expand more rapidly than potential output in 2016 and 2017, even as the normalization of the stance of monetary policy was assumed to proceed. However, real GDP growth over the medium term was revised down a small amount, in part because of a slightly stronger forecast for the exchange value of the dollar. The staff also made two small adjustments to its supply-side assumptions. First, the projected rates of productivity gains and potential output growth over the medium term were trimmed. With actual and potential GDP growth both a bit weaker, the projected narrowing of the output gap over the medium term was little revised. Second, the staff lowered slightly its estimate of the longer-run natural rate of unemployment. The unemployment rate was expected to decline gradually to this revised estimate.

The staff’s forecast for inflation was revised down, particularly in the near term, as the decline in crude oil prices over the intermeeting period was expected to result in lower consumer energy prices. Although energy prices and non-oil import prices were expected to begin rising steadily next year, the staff continued to project that inflation would be below the Committee’s longer-run objective of 2 percent over 2016 and 2017. Inflation was anticipated to move up gradually to 2 percent thereafter, with inflation expectations in the longer run assumed to be consistent with the Committee’s objective and slack in labor and product markets projected to have waned.

The staff viewed the uncertainty around its July projections for real GDP growth, the unemployment rate, and inflation as similar to the average of the past 20 years. The risks to the forecast for real GDP and inflation were seen as tilted to the downside, reflecting the staff’s assessment that neither monetary nor fiscal policy was well positioned to help the economy withstand substantial adverse shocks. At the same time, the staff viewed the risks around its outlook for the unemployment rate as roughly balanced.

Participants’ Views on Current Conditions and the Economic Outlook
In their discussion of the economic situation and the outlook, meeting participants viewed the information received over the intermeeting period as suggesting that economic activity had been expanding moderately in recent months. The pace of job gains had been solid and the unemployment rate had declined, with a range of labor market indicators suggesting that underutilization of labor resources had continued to diminish. Participants generally viewed the incoming data as confirming their earlier assessment that the weak report on real GDP in the first quarter reflected transitory factors and expected that real economic activity would continue to expand at a moderate pace over the balance of the year, leading to further improvement in labor market conditions. However, a few participants observed that although GDP growth appeared to have picked up in recent months relative to the first-quarter pace, the level of GDP remained lower than had been projected earlier in the year. Inflation continued to run below the Committee’s 2 percent longer-run objective, partly reflecting earlier declines in energy prices and further decreases in prices of non-energy imports. Market-based measures of inflation compensation remained low, while survey-based measures of longer-term inflation expectations remained stable. Participants generally anticipated that inflation would rise gradually toward 2 percent as the labor market improved further and the transitory effects of earlier declines in energy and import prices dissipated. Although many continued to see some downside risks arising from economic and financial developments abroad, participants generally viewed the risks to the outlook for domestic economic activity and the labor market as nearly balanced.

With respect to consumer spending, the incoming data had been uneven but participants cited reports from contacts suggesting a pickup since the first quarter. Participants generally expected consumer spending to rise moderately over the near term. Continued gains in employment and income, high household net worth, and low gasoline prices were viewed as factors that should support consumer spending in coming months. Consumer credit conditions were also seen as favorable, with business contacts pointing to steady loan growth, especially for auto loans and credit cards. However, a couple of participants were concerned about the outlook for consumer spending, noting that spending had been disappointing in recent months even though real income had already been boosted by the lower gasoline prices and the improved labor market.

Participants viewed the recent data on housing starts and permits as well as the higher levels of sales and prices as indicative of continued recovery in the housing sector. The easing of lending standards for residential mortgages evidenced in the most recent SLOOS was cited as a factor likely to support further progress. However, a couple of participants noted that they did not expect this sector to be a major contributor to economic growth over the remainder of the year.

Participants also observed that activity in other sectors of the economy continued to be subdued. Business fixed investment remained soft even as the drag from the sharp contraction in drilling rigs over the first half of this year appeared to be fading. Although investment spending was expected to pick up over the second half of this year, a few participants were concerned that the further decline in oil prices that had occurred in recent weeks might continue to hold down energy-related investment. In addition, government spending was expected to add very little to growth in aggregate spending this year. Participants also expected net exports to continue to subtract from GDP growth over the second half of the year, reflecting in part the damping influence of the dollar’s earlier appreciation.

Industry contacts pointed to generally solid business conditions, with firms in many parts of the country continuing to report positive assessments of current activity and optimism about future sales. Manufacturing activity had slowed somewhat over the intermeeting period, but conditions were mixed across different industries. Those firms connected to the auto, aerospace, and construction industries, for example, reported strong demand. However, businesses particularly exposed to the appreciation of the dollar or falling commodity prices–including those in the heavy equipment and steel, oil and gas extraction, and petrochemical industries–reported slower activity. The service sector reports were mostly positive. Overall, most contacts viewed the recent slowdown in manufacturing as likely to prove temporary and remained optimistic about future demand, even though the recent decreases in oil prices and the possibility of adverse spillovers from slower economic growth in China raised some concerns. Regarding the agricultural sector, a very wet spring had significantly reduced the percentage of crops in good condition, and declining commodity prices had further reduced expectations for farm income.

In their discussion of the foreign economic outlook, participants generally viewed the risks from the fiscal and financial problems in Greece as having diminished somewhat, although it was observed that Greece still faced many challenges and that Greek economic progress was likely to be limited over the near term. While the recent Chinese stock market decline seemed to have had limited implications to date for the growth outlook in China, several participants noted that a material slowdown in Chinese economic activity could pose risks to the U.S. economic outlook. Some participants also discussed the risk that a possible divergence in interest rates in the United States and abroad might lead to further appreciation of the dollar, extending the downward pressure on commodity prices and the weakness in net exports.

Participants agreed that labor market conditions had improved further, citing increases in payroll employment and job openings, the decrease in the unemployment rate, and some further reduction in broader measures of labor market underutilization. Although the labor force participation rate declined in June and the national hiring and quits rates were little changed in May, several participants noted that reports from business contacts in their Districts pointed to continued job gains and relatively strong labor markets. They cited anecdotal reports of firms having concerns about retaining workers and facing difficulties in filling even medium- and lower-skilled jobs. However, several participants contended that, despite the progress over the past few years, some noticeable margins of slack remained, citing as evidence the high number of workers not actively searching for jobs but available and interested in work as well as the high share of employees working part time for economic reasons compared with pre-recession levels.

The ongoing rise in labor demand still appeared not to have led to a broad-based firming of wage increases. While business contacts in a number of Districts continued to report that the pace of wage increases had picked up, recent national readings on hourly compensation and average hourly earnings of employees had remained subdued. The most recent employment cost index, released in April, had suggested an increase in wage gains. However, questions were raised about how to interpret this reading because the pickup was concentrated in the Northeast and might have resulted from particular factors that were not associated solely with a general tightening of labor market conditions, such as minimum wage adjustments and market conditions in certain occupations. In addition, it was noted that considerable uncertainty remained about when wages might begin to accelerate and whether that development might translate into increased price inflation.

Participants discussed how recent developments influenced their expectations for reaching the FOMC’s 2 percent inflation objective over the medium term. Total PCE inflation continued to run below the Committee’s longer-run objective. Core PCE price inflation, as measured on a 12-month change basis, also remained low, but other measures, such as the trimmed mean PCE and median CPI, continued to run at higher levels than core PCE inflation. Moreover, core CPI inflation had picked up over recent months. Some participants cited downside risks to inflation, pointing to the absence of any noticeable response of inflation to the reduction in resource slack over the past several years, risks of further declines in oil and commodity prices, and the possibility of further appreciation in the dollar. Although most readings on longer-term inflation expectations were little changed recently, participants discussed how to interpret downward movements in some survey and market-based measures of inflation expectations over the past few years. Most participants still expected that the downward pressure on inflation from the previous declines in energy prices and the effects of past dollar appreciation would prove to be temporary. Participants generally continued to anticipate that, with appropriate monetary policy, inflation would move up to the Committee’s objective over the medium term, reflecting the anticipated tightening of product and labor markets and stable longer-term inflation expectations.

Participants discussed a range of topics associated with financial market developments and financial stability. They commented on issues related to the deterioration in bond market liquidity reported by market participants, the potential migration of leveraged loan underwriting to the nonbank sector in light of current supervisory guidance, and the assessment of valuation risks when term premiums were narrow while most other risk premiums were not. In addition, it was observed that Puerto Rico faced significant challenges servicing its debts, though the risks of contagion to other U.S. financial markets were judged to be low. Participants also noted the challenges associated with identifying newly emerging risks as well as the implications for monetary policy of a hypothetical future situation in which financial imbalances were increasing.

During their discussion of economic conditions and monetary policy, participants mentioned a number of considerations associated with the timing and pace of policy normalization. Most judged that the conditions for policy firming had not yet been achieved, but they noted that conditions were approaching that point. Participants observed that the labor market had improved notably since early this year, but many saw scope for some further improvement. Many participants indicated that their outlook for sustained economic growth and further improvement in labor markets was key in supporting their expectation that inflation would move up to the Committee’s 2 percent objective, and that they would be looking for evidence that the economic outlook was evolving as they anticipated. However, some participants expressed the view that the incoming information had not yet provided grounds for reasonable confidence that inflation would move back to 2 percent over the medium term and that the inflation outlook thus might not soon meet one of the conditions established by the Committee for initiating a firming of policy. Several of these participants cited evidence that the response of inflation to the elimination of resource slack might be attenuated and expressed concern about risks of further downward pressure on inflation from international developments. Another concern related to the risk of premature policy tightening was the limited ability of monetary policy to offset downside shocks to inflation and economic activity when the federal funds rate was near its effective lower bound.

Some participants, however, emphasized that the economy had made significant progress over the past few years and viewed the economic conditions for beginning to increase the target range for the federal funds rate as having been met or were confident that they would be met shortly. A few of these participants judged that the stance of monetary policy, including the extraordinarily low level of the federal funds rate and the current size of the Federal Reserve balance sheet, was very accommodative. A couple of others thought that an appreciable delay in beginning the process of normalization might result in an undesirable increase in inflation or have adverse consequences for financial stability. Some participants advised that progress toward the Committee’s objectives should be viewed in light of the cumulative gains made to date without overemphasizing month-to-month changes in incoming data. It was also noted that a prompt start to normalization would likely convey the Committee’s confidence in prospects for the economy.

In their discussion of the appropriate path for the federal funds rate and associated communications at and after the time of the first increase in the target range, participants expressed support for emphasizing that the course of policy would remain conditional on the Committee’s assessment of economic developments and the outlook relative to its objectives. It was also noted that the Committee’s communications around the time of the first rate increase should emphasize that the expected path for policy, not the initial increase, would be the most important determinant of financial conditions and should acknowledge that policy would continue to be accommodative to support progress toward the Committee’s dual objectives. While monetary policy adjustments ultimately would be data dependent, some participants expressed the view that, in light of their current outlook, it likely would be appropriate to adjust the federal funds rate gradually after the first increase to help ensure that the economy would be able to absorb higher interest rates and that inflation was moving toward the Committee’s objective.

Committee Policy Action
In their discussion of monetary policy for the period ahead, members judged that information received since the FOMC met in June indicated that economic activity had been expanding moderately in recent months. The labor market had also continued to improve, with solid job gains and declining unemployment. A range of labor market indicators, on balance, suggested that underutilization of labor resources had diminished since early this year. Members generally viewed these developments, together with appropriate monetary policy accommodation, as supporting their expectations for moderate economic growth in the medium term and for further improvement in labor market conditions. They also continued to see the risks to the outlook for economic activity and the labor market as nearly balanced. Inflation had continued to run below the Committee’s longer-run objective, but members expected it to rise gradually toward 2 percent over the medium term as the labor market improved further and the transitory effects of earlier declines in energy and import prices dissipated.

In assessing whether economic conditions had improved sufficiently to initiate a firming in the stance of monetary policy, the Committee noted that, on balance, a range of labor market indicators suggested that underutilization of labor resources had diminished further. Most members saw room for some additional progress in reducing labor market slack, although several viewed current labor market conditions as at or very close to those consistent with maximum employment. Many members thought that labor market underutilization would be largely eliminated in the near term if economic activity evolved as they expected. However, several were concerned that labor market conditions consistent with maximum employment could take longer to achieve, noting, for example, the lack of convincing signs of accelerating wages, which might be signaling that the natural rate of unemployment could currently be lower than they previously thought.

In considering the Committee’s criteria with respect to inflation for beginning policy normalization, most members viewed the incoming data as reinforcing their earlier assessment that, although inflation continued to run below the Committee’s objective, the downward pressure on inflation from the previous decreases in energy prices and the effects of past dollar appreciation would abate. However, core inflation on a year-over-year basis also was still below 2 percent. Moreover, some members continued to see downside risks to inflation from the possibility of further dollar appreciation and declines in commodity prices. In addition, several members noted that higher rates of resource utilization appeared to have had only very limited effects to date on wages and prices, and underscored the uncertainty surrounding the inflation process as well as the role and dynamics of inflation expectations. The Committee agreed to continue to monitor inflation developments closely, with almost all members indicating that they would need to see more evidence that economic growth was sufficiently strong and labor markets conditions had firmed enough for them to feel reasonably confident that inflation would return to the Committee’s longer-run objective over the medium term.

The Committee concluded that, although it had seen further progress, the economic conditions warranting an increase in the target range for the federal funds rate had not yet been met. Members generally agreed that additional information on the outlook would be necessary before deciding to implement an increase in the target range. One member, however, indicated a readiness to take that step at this meeting but was willing to wait for additional data to confirm a judgment to raise the target range.

In their discussion of language for the postmeeting statement, members agreed that the wording should reflect their assessment that economic conditions showed continued progress toward the Committee’s objectives. The Committee updated the statement to indicate that economic activity had been expanding moderately in recent months and that it had seen further improvement in labor market conditions over the intermeeting period, pointing specifically to solid job gains and declining unemployment. In addition, the Committee agreed to state that a range of labor market indicators suggested that underutilization of labor resources had diminished since early this year, acknowledging the cumulative progress that had been made in the labor market. The Committee also modified the discussion of inflation developments slightly to recognize the more recent declines in energy prices while restating the expectation that inflation would rise gradually toward 2 percent over the medium term as the labor market improved further and the transitory effects of earlier declines in energy and import prices dissipated.

The Committee agreed to maintain the target range for the federal funds rate at 0 to 1/4 percent and to reaffirm in the statement that the Committee’s decision about how long to maintain the current target range for the federal funds rate would depend on its assessment of actual and expected progress toward its objectives of maximum employment and 2 percent inflation. Members also agreed that their evaluation of progress on their objectives would 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. To further reflect the Committee’s assessment that economic conditions had continued to progress toward its objectives, the Committee slightly altered its characterization of when it anticipates that it will be appropriate to begin the process of policy normalization. Specifically, members agreed to indicate the Committee’s anticipation that it would 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 also maintained its policy of reinvesting principal payments from 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. The Committee reiterated its expectation 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.

At the conclusion of the discussion, the Committee voted to authorize and direct the Federal Reserve Bank of New York, until it was instructed otherwise, to execute transactions in the SOMA in accordance with the following domestic policy directive:

“Consistent with its statutory mandate, the Federal Open Market Committee seeks monetary and financial conditions that will foster maximum employment and price stability. In particular, the Committee seeks conditions in reserve markets consistent with federal funds trading in a range from 0 to 1/4 percent. The Committee directs the Desk to undertake open market operations as necessary to maintain such conditions. The Committee directs the Desk to maintain its policy of rolling over maturing Treasury securities into new issues and its policy of reinvesting principal payments on all agency debt and agency mortgage-backed securities in agency mortgage-backed securities. The Committee also directs the Desk to engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve’s agency mortgage-backed securities transactions. The System Open Market Account manager and the secretary will keep the Committee informed of ongoing developments regarding the System’s balance sheet that could affect the attainment over time of the Committee’s objectives of maximum employment and price stability.”

The vote encompassed approval of the statement below to be released at 2:00 p.m.:

“Information received since the Federal Open Market Committee met in June indicates that economic activity has been expanding moderately in recent months. Growth in household spending has been moderate and the housing sector has shown additional improvement; however, business fixed investment and net exports stayed soft. The labor market continued to improve, with solid job gains and declining unemployment. On balance, a range of labor market indicators suggests that underutilization of labor resources has diminished since early this year. Inflation continued to run below the Committee’s longer-run objective, partly reflecting earlier declines in energy prices and decreasing prices of non-energy imports. Market-based measures of inflation compensation 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. 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. 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 this action: Janet L. Yellen, William C. Dudley, 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 this action: None.

Long-Run Monetary Policy Implementation Framework
At the conclusion of the meeting, the Chair noted that the staff would soon begin an extended effort to evaluate potential long-run monetary policy implementation frameworks. In view of the likely time frames for normalization of the stance of monetary policy and the System’s balance sheet, the Committee probably would not need to reach any final decisions regarding such a framework for several years. Moreover, the process of normalization will likely provide a great deal of information about money markets and the Federal Reserve’s policy tools that will help inform the Committee’s judgment about a long-run implementation framework. Nonetheless, because the analysis will likely address a wide range of topics, it seemed appropriate to begin now to organize and undertake the work.

Previous staff work on implementation frameworks was presented to the Committee in April 2008 and focused largely on alternative frameworks that could be used to target the federal funds rate. Those topics would be an important part of the current undertaking as well. However, in light of experience over recent years, policymakers agreed that a number of related issues warranted attention, including topics such as the effectiveness of alternative implementation frameworks in scenarios that could require a return to the zero lower bound, regulatory and other structural developments that could affect financial institutions and markets in ways that would affect monetary policy implementation, and the long-run structure of the Federal Reserve’s assets and liabilities that best supports the System’s macroeconomic objectives and financial stability. In discussing the range of issues contemplated for study under this project, it was noted that the Policy Normalization Principles and Plans reflect the Committee’s intention that, in the longer run, the Federal Reserve will hold no more securities than necessary to implement monetary policy efficiently and effectively and that the Federal Reserve will hold primarily Treasury securities.

Policymakers agreed that it would be important to draw on the perspectives of staff across the Federal Reserve System and to consult widely with other central banks, academics, and other experts on markets, financial institutions, and monetary policy. The project was expected to run through the end of 2016. Policymakers will review progress and provide input as the work proceeds.

It was agreed that the next meeting of the Committee would be held on Wednesday-Thursday, September 16-17, 2015. The meeting adjourned at 10:45 a.m. on July 29, 2015.

Notation Vote
By notation vote completed on July 7, 2015, the Committee unanimously approved the minutes of the Committee meeting held on June 16-17, 2015.

_____________________________

Brian F. Madigan
Secretary


(por Gabriel Codas)


Fonte: Enfoque
Publicado em: 19/08/2015 14:54:55

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Confira a decisão do Fomc na íntegra (em inglês)


São Paulo, 29/07 (Enfoque) – Information received since the Federal Open Market Committee met in June indicates that economic activity has been expanding moderately in recent months. Growth in household spending has been moderate and the housing sector has shown additional improvement; however, business fixed investment and net exports stayed soft. The labor market continued to improve, with solid job gains and declining unemployment. On balance, a range of labor market indicators suggests that underutilization of labor resources has diminished since early this year. Inflation continued to run below the Committee’s longer-run objective, partly reflecting earlier declines in energy prices and decreasing prices of non-energy imports. Market-based measures of inflation compensation 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. 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. 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


(por Gabriel Codas)


Fonte: Enfoque
Publicado em: 29/07/2015 15:03:24

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Confira a decisão do Fomc na íntegra (em inglês)


São Paulo, 17/06 (Enfoque) – Information received since the Federal Open Market Committee met in April suggests that economic activity has been expanding moderately after having changed little during the first quarter. The pace of job gains picked up while the unemployment rate remained steady. On balance, a range of labor market indicators suggests that underutilization of labor resources diminished somewhat. Growth in household spending has been moderate and the housing sector has shown some improvement; however, business fixed investment and net exports stayed soft. Inflation continued to run below the Committee’s longer-run objective, partly reflecting earlier declines in energy prices and decreasing prices of non-energy imports; energy prices appear to have stabilized. Market-based measures of inflation compensation 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. 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. 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 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.


(por Gabriel Codas)


Fonte: Enfoque
Publicado em: 17/06/2015 15:05:34

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Confira a decisão do Fomc na íntegra (em inglês)


São Paulo, 08/04 (Enfoque) –

A meeting of the Federal Open Market Committee was held in the offices of the Board of Governors of the Federal Reserve System in Washington, D.C., on Tuesday, March 17, 2015, at 10:30 a.m. and continued on Wednesday, March 18, 2015, at 9:00 a.m.
PRESENT:


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
John C. Williams


James Bullard, Christine Cumming, Esther L. George, Loretta J. Mester, and Eric Rosengren, Alternate Members of the Federal Open Market Committee


Narayana Kocherlakota, President of the Federal Reserve Bank of Minneapolis


Helen E. Holcomb and Blake Prichard, First Vice Presidents, Federal Reserve Banks of Dallas and Philadelphia, respectively


Thomas Laubach, Secretary and Economist


Matthew M. Luecke, Deputy Secretary


David W. Skidmore, Assistant Secretary


Michelle A. Smith, Assistant Secretary


Scott G. Alvarez, General Counsel


Thomas C. Baxter, Deputy General Counsel


Steven B. Kamin, Economist


David W. Wilcox, Economist


David Altig, Thomas A. Connors, Michael P. Leahy, William R. Nelson, Glenn D. Rudebusch, Daniel G. Sullivan, William Wascher, and John A. Weinberg, Associate Economists


Simon Potter, Manager, System Open Market Account


Lorie K. Logan, Deputy Manager, System Open Market Account


Robert deV. Frierson,1 Secretary of the Board, Office of the Secretary, Board of Governors


Michael S. Gibson, Director, Division of Banking Supervision and Regulation, Board of Governors


James A. Clouse, Deputy Director, Division of Monetary Affairs, Board of Governors


William B. English, Senior Special Adviser to the Board, Office of Board Members, Board of Governors


Andrew Figura, David Reifschneider, and Stacey Tevlin, Special Advisers to the Board, Office of Board Members, Board of Governors


Trevor A. Reeve, Special Adviser to the Chair, Office of Board Members, Board of Governors


Linda Robertson, Assistant to the Board, Office of Board Members, Board of Governors


David E. Lebow and Michael G. Palumbo, Senior Associate Directors, Division of Research and Statistics, Board of Governors


Michael T. Kiley, Senior Adviser, Division of Research and Statistics, and Senior Associate Director, Office of Financial Stability Policy and Research, Board of Governors


Ellen E. Meade and Joyce K. Zickler, Senior Advisers, Division of Monetary Affairs, Board of Governors


Fabio M. Natalucci2 and Gretchen C. Weinbach,1 Associate Directors, Division of Monetary Affairs, Board of Governors


Jane E. Ihrig and David López-Salido, Deputy Associate Directors, Division of Monetary Affairs, Board of Governors; John J. Stevens, Deputy Associate Director, Division of Research and Statistics, Board of Governors


Glenn Follette, Assistant Director, Division of Research and Statistics, Board of Governors; Elizabeth Klee, Assistant Director, Division of Monetary Affairs, Board of Governors


Penelope A. Beattie,1 Assistant to the Secretary, Office of the Secretary, Board of Governors


Dana L. Burnett and Don Kim, Section Chiefs, Division of Monetary Affairs, Board of Governors


Katie Ross,1 Manager, Office of the Secretary, Board of Governors


David H. Small, Project Manager, Division of Monetary Affairs, Board of Governors


Zeynep Senyuz, Economist, Division of Monetary Affairs, Board of Governors


Kenneth C. Montgomery, First Vice President, Federal Reserve Bank of Boston


Ron Feldman, Executive Vice President, Federal Reserve Bank of Minneapolis


Michael Dotsey, Craig S. Hakkio, Evan F. Koenig, and Paolo A. Pesenti, Senior Vice Presidents, Federal Reserve Banks of Philadelphia, Kansas City, Dallas, and New York, respectively


David Andolfatto, Todd E. Clark, Antoine Martin, Joe Peek, and Douglas Tillett, Vice Presidents, Federal Reserve Banks of St. Louis, Cleveland, New York, Boston, and Chicago, respectively


Developments in Financial Markets and the Federal Reserve’s Balance Sheet
In a joint session of the Federal Open Market Committee (FOMC) and the Board of Governors of the Federal Reserve System, the manager of the System Open Market Account (SOMA) reported on developments in domestic and foreign financial markets. The deputy manager followed with a review of System open market operations conducted during the period since the Committee met on January 27-28, 2015. The deputy manager also discussed the outcomes of recent tests of supplementary normalization tools–namely, the Term Deposit Facility (TDF) and term and overnight reverse repurchase agreement operations (term RRP operations and ON RRP operations, respectively). The TDF operations were executed as three overlapping 21-day term operations with same-day settlement; the total amount of term deposits outstanding peaked at roughly the same level as in the largest operation conducted in prior testing. The term RRP operations were executed as a series of four one-week operations and conducted away from quarter-end; take-up primarily represented substitution away from ON RRP operations. The combination of these term and ON RRP test operations continued to provide a soft floor for money market rates over the intermeeting period.


By unanimous vote, the Committee ratified the Open Market Desk’s domestic transactions over the intermeeting period. There were no intervention operations in foreign currencies for the System’s account over the intermeeting period.


Normalization Tools
A staff briefing provided background on options for setting the aggregate capacity of the ON RRP facility in the early stages of the normalization process. Two options were discussed: initially setting a temporarily elevated aggregate cap or suspending the aggregate cap for a time. The briefing noted that, as the balance sheet normalizes and reserve balances decline, usage of the ON RRP facility should diminish, allowing the facility to be phased out over time. In addition, the briefing outlined strategies for actively reducing take-up at the ON RRP facility after policy normalization is under way, while maintaining an appropriate degree of monetary control, if take-up is larger than the FOMC desires. These strategies included adjusting the values of the interest on excess reserves (IOER) and ON RRP rates associated with a given target range for the federal funds rate, relying on tools such as term RRPs and the TDF to broaden arbitrage opportunities and to drain reserve balances, and selling shorter-term Treasury securities to reduce the size of the balance sheet at a faster pace. In addition, the briefing presented some information on specific calibrations of policy tools that could be used during the early stages of policy normalization.


In their discussion of the options and strategies surrounding the use of tools at liftoff and the potential subsequent reduction in aggregate ON RRP capacity, participants emphasized that during the early stages of policy normalization, it will be a priority to ensure appropriate control over the federal funds rate and other short-term interest rates. Against this backdrop, participants generally saw some advantages to a temporarily elevated aggregate cap or a temporary suspension of the cap to ensure that the facility would have sufficient capacity to support policy implementation at the time of liftoff, but they also indicated that they expected that it would be appropriate to reduce ON RRP capacity fairly soon after the Committee begins firming the stance of policy. A couple of participants stated their view that the risks to financial stability that might arise from a temporarily elevated aggregate ON RRP capacity were likely to be small, and it was noted that there might be little potential for a temporarily large Federal Reserve presence in money markets to affect the structure of those markets if plans for reducing the facility’s capacity were clearly communicated and well understood. However, a couple of participants expressed financial stability concerns, and one stressed that more planning was needed to address the potential risks before the Committee decides on the appropriate level of ON RRP capacity at the time of liftoff.


In their discussion regarding strategies for reducing ON RRP usage, should it become undesirably large during the early stages of normalization, most participants viewed raising the IOER rate, thereby widening the spread between the IOER and ON RRP rates, as an appropriate initial step. A majority of participants thought term reserve draining tools could be useful in reducing ON RRP usage, although a couple of participants questioned their effectiveness in placing upward pressure on market interest rates, and a few did not see term RRPs as reducing the Federal Reserve’s presence in money markets, arguing that investors view term and overnight RRPs as close substitutes. Many participants mentioned that selling assets that will mature in a relatively short time could be considered at some stage, if necessary to reduce ON RRP usage. However, a number of participants noted that it could be difficult to communicate the reason for such sales to the public, and, in particular, that the announcement of such sales would risk an outsized market reaction, as the public could view the sales as a signal of a tighter overall stance of monetary policy than they had anticipated or as an indication that the Committee might be more willing than had been thought to sell longer-term assets. Some participants pointed out that an earlier end to reinvestments of principal on maturing or prepaying securities would help reduce the level of reserve balances, thereby increasing the effectiveness of the IOER rate and allowing a more rapid reduction in the size of the ON RRP facility. A number of participants suggested that it would be useful to consider specific plans for these and other details of policy normalization under a range of post-liftoff scenarios.


Participants also discussed whether to communicate to the public additional details regarding the approach they intend to take when it becomes appropriate to begin the normalization process, including the width of the target range for the federal funds rate, the settings of the IOER and ON RRP rates, and the use of supplementary tools. A couple of participants suggested communicating a specific commitment to reducing ON RRP capacity soon after liftoff. However, a number of participants emphasized that maintaining control of short-term interest rates would be paramount in the initial stages of policy normalization, and that it was difficult to know in advance when a reduction would be appropriate. They therefore desired to retain some flexibility over the timing of any reduction. That said, many participants agreed that an elevated aggregate capacity for the facility would likely be appropriate only for a short period after liftoff.


At the conclusion of their discussion, all participants agreed to augment the Committee’s Policy Normalization Principles and Plans by providing the following additional details regarding the operational approach the FOMC intends to use when it becomes appropriate to begin normalizing the stance of monetary policy.3


When economic conditions warrant the commencement of policy firming, the Federal Reserve intends to:


Continue to target a range for the federal funds rate that is 25 basis points wide.
Set the IOER rate equal to the top of the target range for the federal funds rate and set the offering rate associated with an ON RRP facility equal to the bottom of the target range for the federal funds rate.
Allow aggregate capacity of the ON RRP facility to be temporarily elevated to support policy implementation; adjust the IOER rate and the parameters of the ON RRP facility, and use other tools such as term operations, as necessary for appropriate monetary control, based on policymakers’ assessments of the efficacy and costs of their tools. The Committee expects that it will be appropriate to reduce the capacity of the facility fairly soon after it commences policy firming.
A staff briefing outlined some options for further testing of term RRP operations over future quarter-ends. While the tests of term RRPs to date had been informative, the staff suggested that if the Committee envisioned using term RRPs as part of its strategy at liftoff, or potentially at some other point during normalization, continued testing may be useful. Participants discussed whether a resolution that authorized term RRP test operations at quarter-ends through the end of 2015 might reduce the probability that market participants mistakenly interpret future decisions about testing term RRPs over quarter-ends as containing information about the likely timing of liftoff. It was noted that such a resolution would be more efficient from an administrative and communications standpoint, as it would simply allow a continuation of recent quarter-end testing of term RRPs. Moreover, the resolution would not convey any information regarding either the timing of the start of policy normalization or whether term RRP operations might be employed at the time of liftoff and, if so, for how long.


Following the discussion of the testing of term RRP operations, the Committee approved the following resolution on term RRP testing over quarter-ends through January 29, 2016:


“During each of the periods of June 18 to 29, 2015; September 18 to 29, 2015; and December 17 to 30, 2015, the Federal Open Market Committee (FOMC) authorizes the Federal Reserve Bank of New York to conduct a series of term reverse repurchase operations involving U.S. government securities. Such operations shall: (i) mature no later than July 8, 2015, October 7, 2015, and January 8, 2016, respectively; (ii) be subject to an overall size limit of $300 billion outstanding at any one time; (iii) be subject to a maximum bid rate of five basis points above the ON RRP offering rate in effect on the day of the operation; (iv) be awarded to all submitters: (A) at the highest submitted rate if the sum of the bids received is less than or equal to the preannounced size of the operation, or (B) at the stop-out rate, determined by evaluating bids in ascending order by submitted rate up to the point at which the total quantity of bids equals the preannounced size of the operation, with all bids below this rate awarded in full at the stop-out rate and all bids at the stop-out rate awarded on a pro rata basis, if the sum of the counterparty offers received is greater than the preannounced size of the operation. Such operations may be for forward settlement. The System Open Market Account manager will inform the FOMC in advance of the terms of the planned operations. The Chair must approve the terms of, timing of the announcement of, and timing of the operations. These operations shall be conducted in addition to the authorized overnight reverse repurchase agreements, which remain subject to a separate overall size limit authorized by the FOMC.”


Mr. Lacker dissented in the vote on the resolution because the March end-of-quarter testing had not yet been completed and he felt that there was no need to authorize additional testing before then.


The Board meeting concluded at the end of the discussion of normalization tools.


Staff Review of the Economic Situation
The information reviewed for the March 17?18 meeting suggested that real gross domestic product (GDP) growth moderated in the first quarter and that labor market conditions improved further. Consumer price inflation was restrained significantly by declines in energy prices and continued to run below the FOMC’s longer-run objective of 2 percent. Market-based measures of inflation compensation were still low, while survey measures of longer-run inflation expectations remained stable.


Nonfarm payroll employment continued to expand strongly in January and February. The unemployment rate declined to 5.5 percent in February. Both the labor force participation rate and the employment-to- population ratio rose slightly over the first two months of the year, and the share of workers employed part time for economic reasons edged down. The rate of private-sector job openings moved up in January and was at an elevated level; the rate of quits remained the same as in the fourth quarter, but the rate of hiring stepped down.


Industrial production decreased a little, on net, in January and February, as declines in the output of the manufacturing and mining sectors more than offset an increase in utilities production. Some indicators of mining activity, such as counts of drilling rigs in operation, dropped further. However, automakers’ assembly schedules and broader indicators of manufacturing production, such as the readings on new orders from national and regional manufacturing surveys, generally pointed to modest gains in factory output in coming months.


Real personal consumption expenditures (PCE) appeared to decelerate somewhat going into the first quarter after rising markedly in the fourth quarter. The components of the nominal retail sales data used by the Bureau of Economic Analysis to construct its estimate of PCE declined slightly in January and February, and light motor vehicle sales stepped down; unusually severe weather in some regions in February may have accounted for a small part of the slowing in consumer spending in that month. Recent information about key factors that influence household spending pointed toward a pickup in PCE in the coming months. The purchasing power of households’ income continued to be supported by low energy prices, and real disposable income rose briskly in January. Moreover, households’ net worth likely increased as equity prices and home values advanced further, and consumer sentiment in the University of Michigan Surveys of Consumers was still near its highest level since prior to the most recent recession.


The pace of activity in the housing sector remained slow. Both starts and building permits for new single-family homes declined over January and February. Starts of multifamily units also decreased, on net, over the past two months. Sales of new and existing homes moved down in January, although pending home sales increased somewhat.


Real private expenditures for business equipment and intellectual property products appeared to be expanding in the first quarter at about the same modest pace as in the previous quarter. Both nominal orders and shipments of nondefense capital goods excluding aircraft rose in January. New orders for these capital goods remained above the level of shipments, indicating that shipments may increase in subsequent months. Other forward-looking indicators, such as national and regional surveys of business conditions, were generally consistent with modest increases in business equipment spending in the near term. Firms’ nominal spending for nonresidential structures moved down in January after rising in the fourth quarter.


Federal spending data for January and February pointed toward a further decline in real federal government purchases in the first quarter. Real state and local government purchases appeared to be rising modestly in the first quarter as their payrolls increased in recent months, although their construction expenditures decreased a little in January.


The U.S. international trade deficit widened substantially in December before narrowing somewhat in January. Exports declined in both December and January, reflecting weak agricultural goods exports, the lower price of petroleum products, and falling or flat exports of most other categories of goods. Imports rose in December, with an increased volume of petroleum imports, but declined in January, driven by lower prices and volumes for petroleum.


Total U.S. consumer prices, as measured by the PCE price index, edged up only 1/4 percent over the 12 months ending in January, as energy prices declined significantly. The core PCE price index, which excludes food and energy prices, rose 1-1/4 percent over the same 12-month period. Measures of expected long-run inflation from a variety of surveys, including the Michigan survey, the Blue Chip Economic Indicators, the Survey of Professional Forecasters, and the Desk’s Survey of Primary Dealers, remained stable. Market-based measures of inflation compensation were still low. Measures of labor compensation continued to increase at a modest pace, although faster than consumer prices. Both compensation per hour in the nonfarm business sector and the employment cost index rose 2-1/4 percent over the year ending in the fourth quarter. Average hourly earnings for all employees increased 2 percent over the 12 months ending in February.


Foreign real GDP appeared to expand at a moderate pace in the fourth quarter. While GDP growth stepped down in several economies, including Canada and China, it picked up in the euro area, Japan, and Mexico. Indicators for the first quarter suggested continued firming in the euro area and further slowing in China and Canada. Consumer prices in many foreign economies declined further in the first months of this year, reflecting the falls in energy prices as well as decreases in food prices in some emerging market economies. Many central banks took steps to ease monetary policy during the period, including the European Central Bank (ECB), which began purchasing sovereign bonds under its public sector purchase program (PSPP), and the People’s Bank of China, which lowered required reserve ratios for banks. A number of other central banks in advanced and emerging market economies cut policy interest rates.


Staff Review of the Financial Situation
Movements in asset prices over the intermeeting period largely seemed to reflect receding concerns about downside risks to the global economic outlook. Two strong U.S. employment reports and the January consumer price index release, all of which were above market expectations; the start of sovereign bond purchases by the ECB; and the somewhat more encouraging economic news from Europe all appeared to contribute to the improved sentiment in financial markets. Equity prices were higher, on net, although they declined later in the period.


Federal Reserve communications over the intermeeting period, including the minutes of the January FOMC meeting, reportedly were perceived as slightly more accommodative than expected on balance. Market commentary also highlighted Chair Yellen’s statement at the Monetary Policy Report testimony that the eventual removal of the language in the policy statement noting that “the Committee judges that it can be patient in beginning to normalize the stance of monetary policy” should not be viewed as indicating that the federal funds rate would necessarily be increased within a couple of meetings. However, the effects of these communications on the expected path for the federal funds rate were more than offset by reactions to stronger-than-expected data for the labor market and consumer inflation, along with perceptions of receding downside risks to the foreign economic outlook. On net, the expected path for the federal funds rate implied by financial market quotes shifted up over the period.


Yields on nominal Treasury securities increased across the maturity spectrum, and the Treasury yield curve steepened. Measures of inflation compensation based on Treasury Inflation-Protected Securities increased early in the intermeeting period amid rising oil prices but ended the period little changed, on net, after oil prices dropped back.


Broad U.S. equity price indexes moved up, on balance, over the intermeeting period, and one-month option-implied volatility on the S&P 500 index moved down on net. Spreads of 10-year corporate bond yields over those on comparable-maturity Treasury securities for both BBB-rated and speculative-grade issuers narrowed notably, likely reflecting increased appetite for riskier investments. While the tightening of spreads was broad based, the declines in short- and intermediate-term spreads for speculative-grade energy firms were particularly pronounced, retracing most of their strong run-up approaching the end of last year.


Results from the Desk’s Survey of Primary Dealers and Survey of Market Participants for March indicated that the respondents attached the greatest probabilities to the first increase in the target range for the federal funds rate occurring at either the June or September FOMC meeting; those probabilities were marked up relative to the January survey. In addition, survey respondents widely expected the “patient” language to be removed from the FOMC statement following the March meeting. Conditional on this change in the statement, respondents assigned a roughly 40 percent probability, on average, to liftoff occurring two meetings ahead and assigned most of the remaining probability to later dates.


Credit conditions faced by large nonfinancial firms remained generally accommodative. Corporate bond issuance increased in February, mostly reflecting activity by investment-grade firms. Commercial and industrial loans on banks’ books continued to expand strongly, reportedly in part to fund increased merger and acquisition activity. Institutional leveraged loan issuance during January and February was supported by strong issuance of new money loans, while refinancing activity effectively came to a stop, likely reflecting elevated loan spreads. On net, issuance of collateralized loan obligations was only modestly below the strong pace registered in the fourth quarter of 2014.


Financing for the commercial real estate (CRE) sector stayed broadly available over the intermeeting period. Growth of CRE loans on banks’ books remained solid, in part supported by loans to finance construction activity. The issuance of commercial mortgage-backed securities (CMBS) was still robust so far this year, and spreads continued to be low. After taking into account deals in the pipeline for March, issuance in the first quarter of 2015 was expected to be the strongest since the financial crisis. According to the March Senior Credit Officer Opinion Survey on Dealer Financing Terms, dealers’ willingness to provide warehouse financing for loans intended for inclusion in CMBS increased since the beginning of 2014. In addition, demand for funding of CMBS by hedge funds and real estate investment trusts reportedly rose over the same period.


Credit conditions for mortgages remained tight for riskier borrowers, with relatively few mortgages originated to borrowers in the lower portion of the credit score distribution. For borrowers who qualify for a mortgage, the cost of credit stayed low by historical standards.


Consumer credit rose further over the intermeeting period. Auto and student loan balances continued to expand robustly through January, while credit card balances decelerated slightly. Issuance of consumer asset-backed securities remained robust.


The dollar appreciated against most other currencies over the intermeeting period, as policymakers in the euro area, Sweden, Denmark, and many emerging market economies eased monetary policy even as market participants anticipated monetary policy tightening in the United States. Central bank policymakers in Sweden and Denmark lowered the rates on their respective deposit facilities further below zero. In addition, in Sweden, the benchmark repurchase agreement (or repo) rate was reduced in February to below zero for the first time, and a further cut was announced in March. Equity prices rose in most of the advanced foreign economies, with euro-area stocks rallying both before and after the early March commencement of sovereign bond purchases by the ECB under its PSPP. Stock market performance in the emerging market economies was more varied, with net losses in some and net gains in others. Yields on German government securities declined, with negative yields extending to longer maturities than at the time of the January meeting, likely in reaction to the PSPP, and yield spreads of most other euro-area sovereign bonds over German bonds narrowed. The main exception was Greek bonds, spreads on which widened, on net, amid heightened volatility as negotiations between Greece and its official creditors over support for the country’s public finances continued. Yields on the long-term sovereign bonds of many other countries, including Japan and the United Kingdom, rose during the period.


Staff Economic Outlook
In the U.S. economic forecast prepared by the staff for the March FOMC meeting, projected real GDP growth in the first half of this year was lower than in the forecast prepared for the January meeting, largely reflecting downward revisions to the near-term forecasts for household spending, net exports, and residential investment. The staff’s medium-term forecast for real GDP growth also was revised down, mostly because of the effects of a higher projected path for the foreign exchange value of the dollar. Nonetheless, the staff continued to forecast that real GDP would expand at a faster pace than potential output in 2015 and 2016, supported by increases in consumer and business confidence and a small pickup in foreign economic growth, even as the normalization of monetary policy was assumed to begin. In 2017, real GDP growth was projected to slow toward, but to remain above, the rate of potential output growth. The expansion in economic activity over the medium term was anticipated to gradually reduce resource slack; the unemployment rate was expected to decline slowly and to temporarily move a little below the staff’s estimate of its longer-run natural rate. In its medium-term and longer-run projections, the staff slightly lowered its assumptions for potential GDP growth and real equilibrium interest rates.


The staff’s forecast for inflation in the near term was little changed, with the large declines in energy prices since last June still anticipated to lead to a temporary decrease in the 12-month change in total PCE prices in the first half of this year. The staff’s forecast for inflation in 2016 and 2017 was unchanged, as energy prices and non-oil import prices were still expected to bottom out and begin rising later this year; inflation was projected to move closer to, but remain below, the Committee’s longer-run objective of 2 percent over those years. Inflation was anticipated to move back to 2 percent thereafter, with inflation expectations in the longer run assumed to be consistent with the Committee’s objective and slack in labor and product markets projected to have waned.


The staff viewed the extent of uncertainty around its March projections for real GDP growth, the unemployment rate, and inflation as similar to the average over the past 20 years. The risks to the forecasts for real GDP growth and inflation were viewed as tilted a little to the downside, reflecting the staff’s assessment that neither monetary policy nor fiscal policy was well positioned to help the economy withstand adverse shocks. At the same time, the staff viewed the risks around its outlook for the unemployment rate as roughly balanced.


Participants’ Views on Current Conditions and the Economic Outlook
In conjunction with this FOMC meeting, members of the Board of Governors and participating Federal Reserve Bank presidents submitted their projections of the most likely outcomes for real GDP growth, the unemployment rate, inflation, and the federal funds rate for each year from 2015 through 2017 and over the longer run, conditional on each participant’s judgment of appropriate monetary policy.4 The longer-run projections represent each participant’s assessment of the rate to which each variable would be expected to converge, over time, under appropriate monetary policy and in the absence of further shocks to the economy. These economic projections and policy assessments are described in the Summary of Economic Projections, which is attached as an addendum to these minutes.


In their discussion of the economic situation and the outlook, meeting participants regarded the information received over the intermeeting period as indicating that the pace of economic activity had moderated somewhat. Labor market conditions continued to improve, with strong job gains and a lower unemployment rate, and participants judged that underutilization of labor resources was continuing to diminish. A number of participants noted that slow growth of productivity or the labor force could reconcile the moderation in economic growth with the solid performance of some labor market indicators. Participants expected that, over the medium term, real economic activity would expand at a moderate pace and there would be additional improvements in labor market conditions. Participants generally regarded the net effect of declines in energy prices as likely to be positive for economic activity and employment in the United States, although a couple noted that physical limits on the accumulation of stocks of crude oil could result in further downward pressure on prices and reduce U.S. oil and gas production and investment. Inflation had declined further below the Committee’s longer-run objective, largely reflecting declines in energy prices, and was expected to stay near its recent low level in the near term. Market-based measures of inflation compensation 5 to 10 years ahead remained low, while survey-based measures of longer-term inflation expectations had remained stable. Participants generally anticipated that inflation would rise gradually toward the Committee’s 2 percent objective as the labor market improved further and the transitory effects of energy price declines and other factors dissipated. While almost all participants noted potential risks to the economic outlook resulting from foreign economic and financial developments, most saw the risks to the outlook for economic growth and the labor market as nearly balanced.


Household spending appeared to have slowed somewhat over the intermeeting period, with some participants suggesting that the recent softness in spending indicators was likely due in part to transitory factors, such as unseasonably cold winter weather in parts of the country. Some participants expressed the view that growth in consumer spending over the medium term would be supported by the strong labor market and rising income, increases in wealth and improvements in household balance sheets, lower gasoline prices, and gains in consumer confidence. Although activity in the housing sector remained sluggish, a few participants were cautiously optimistic that recent higher rates of household formation, together with low mortgage rates, would enable a faster pace of recovery.


Business contacts in many parts of the country continued to express optimism about prospects for future sales or investment. However, there were widespread reports of a slowdown in growth during the first quarter across a range of industries, partly reflecting severe winter weather in some regions as well as labor disputes at West Coast ports that temporarily disrupted some supply chains. In several parts of the country, persistently low oil prices had resulted in declines in drilling and delays in planned capital expenditures in the energy sector, and had negatively affected state government revenues. Manufacturing contacts in a couple of regions reported a softening in export sales. In contrast, service-sector activity had been reasonably strong in several parts of the country, as had auto sales, and the increase in household purchasing power from lower gasoline prices was expected to boost retail sales. Labor market conditions continued to improve in most regions, with wage pressures generally reported to be modest.


In their discussion of the foreign economic outlook, several participants noted that the dollar’s further appreciation over the intermeeting period was likely to restrain U.S. net exports and economic growth for a time. A few participants suggested that accommodative policy actions by a number of foreign central banks could lead to a further appreciation of the dollar, but another noted that such actions had also strengthened the outlook for growth abroad, which would bolster U.S. exports. Participants pointed to a number of risks to the international economic outlook, including the slowdown in growth in China, fiscal and financial problems in Greece, and geopolitical tensions.


Participants saw broad-based improvement in labor market conditions over the intermeeting period, including strong gains in payroll employment and a further reduction in the unemployment rate. Several participants judged, based on the improvement in a variety of labor market indicators, that the economy was making further progress toward the Committee’s goal of maximum employment. Nonetheless, many judged that some degree of labor market slack remained, as evidenced by the low rate of labor force participation, still-elevated involuntary part-time employment, or subdued growth in wages. A few of them noted that continued modest wage growth could prompt them to reduce their estimates of the longer-run normal rate of unemployment. A few participants observed that the absence of a notable pickup in wages might not be a useful yardstick for evaluating the degree of remaining slack because of the long lags between declines in unemployment and the response of wages or uncertainty about trend productivity growth. One participant, however, saw some evidence of rising wage growth and suggested that compositional changes in the labor force could be masking underlying wage pressures, particularly as measured by average hourly earnings.


Many participants judged that the inflation data received over the intermeeting period had been about in line with their expectations that inflation would move temporarily further below the Committee’s goal, largely reflecting declines in energy prices and lower prices of non-oil imports. They continued to expect that inflation would move up toward the Committee’s 2 percent objective over the medium term as the effects of these transitory factors waned and conditions in the labor market improved further. Survey-based measures of inflation expectations had remained stable, and market-based measures of inflation compensation over the longer term were about unchanged from the time of the January meeting, although they had exhibited some volatility over the intermeeting period. It was noted that the market-based measures had tracked quite closely the movements in crude oil prices over the period, first rising and then falling back. Participants offered various explanations for this correlation, including that market-based measures of inflation compensation were responding to the same global developments as oil prices, that these measures were capturing changes in risk or liquidity premiums, or that inflation-indexed securities were subject to mispricing. A couple of participants pointed out that the movements in crude oil prices and market-based inflation compensation measures had not been particularly well aligned over a longer historical period, or that information gleaned from inflation derivatives suggested a substantial increase in the probability that inflation would remain well below the Committee’s target over the next decade. One of them judged that the low level of inflation compensation could reflect increased concern on the part of investors about adverse outcomes in which low inflation was accompanied by weak economic activity, and that it was important not to dismiss this possible interpretation.


In their discussion of communications regarding the path of the federal funds rate over the medium term, almost all participants favored removing from the forward guidance in the Committee’s postmeeting statement the indication that the Committee would be patient in beginning to normalize the stance of monetary policy. These participants continued to think that an increase in the target range for the federal funds rate was unlikely in April. But, with continued improvement in economic conditions, they preferred language that would provide the Committee with the flexibility to subsequently adjust the target range for the federal funds rate on a meeting-by-meeting basis. It was noted that eliminating the reference to being patient would be appropriate in light of the considerable progress achieved toward the Committee’s objective of maximum employment, and that such a change would not indicate that the Committee had decided on the timing of the initial increase in the target range for the federal funds rate. Participants generally judged that the appropriate timing of liftoff would depend on their assessment of improvement in the labor market and their degree of confidence that inflation would move back to the Committee’s 2 percent objective over the medium term, and that it would be helpful to convey to the public this data-dependent approach to monetary policy. A few participants emphasized that the decision regarding the appropriate timing of liftoff should take account of the risks that could be associated with departing from the effective lower bound later and those that could be associated with departing earlier. One participant did not favor the change to the forward guidance because, with inflation well below the Committee’s 2 percent longer-run target, the announcement of a meeting-by-meeting approach to policy could lead to a tightening of financial conditions that would slow progress toward the Committee’s objectives.


Participants expressed a range of views about how they would assess the outlook for inflation and when they might deem it appropriate to begin removing policy accommodation. It was noted that there were no simple criteria for such a judgment, and, in particular, that, in a context of progress toward maximum employment and reasonable confidence that inflation will move back to 2 percent over the medium term, the normalization process could be initiated prior to seeing increases in core price inflation or wage inflation. Further improvement in the labor market, a stabilization of energy prices, and a leveling out of the foreign exchange value of the dollar were all seen as helpful in establishing confidence that inflation would turn up. Several participants judged that the economic data and outlook were likely to warrant beginning normalization at the June meeting. However, others anticipated that the effects of energy price declines and the dollar’s appreciation would continue to weigh on inflation in the near term, suggesting that conditions likely would not be appropriate to begin raising rates until later in the year, and a couple of participants suggested that the economic outlook likely would not call for liftoff until 2016. With regard to communications about the timing of the first increase in the target range for the federal funds rate, two participants thought that the Committee should seek to signal its policy intentions at the meeting before liftoff appeared likely, but two others judged that doing so would be inconsistent with a meeting-by-meeting approach. Finally, many participants commented that it would be desirable to provide additional information to the public about the Committee’s strategy for policy after the beginning of normalization. Some participants emphasized that the stance of policy would remain highly accommodative even after the first increase in the target range for the federal funds rate, and several noted that they expected economic developments would call for a fairly gradual pace of normalization or that a data-dependent approach would not necessarily dictate increases in the target range at every meeting.


Committee Policy Action
In their discussion of monetary policy for the period ahead, members judged that information received since the FOMC met in January indicated that economic growth had moderated somewhat. Labor market conditions had improved further, with strong job gains and a lower unemployment rate; a variety of labor market indicators suggested that the underutilization of labor resources continued to diminish. Household spending was rising moderately, with declines in energy prices boosting household purchasing power. Business fixed investment was advancing, although the recovery in the housing sector remained slow and export growth had weakened. Inflation had declined further below the Committee’s longer-run objective, largely reflecting the declines in energy prices. Market-based measures of inflation compensation remained low; survey-based measures of longer-term inflation expectations had been stable. The Committee expected that, with appropriate monetary policy accommodation, economic activity would expand at a moderate pace and labor market indicators would continue to move toward levels the Committee judges consistent with its dual mandate. The Committee also expected that inflation would remain near its recent low level in the near term but rise gradually toward 2 percent over the medium term as the labor market improves further and the transitory effects of energy price declines and other factors dissipate. In light of the uncertainties attending the outlook for inflation, the Committee agreed that it should continue to monitor inflation developments closely.


In their discussion of language for the postmeeting statement, the Committee agreed that the data received over the intermeeting period suggested that economic growth had moderated somewhat. One factor behind that moderation was a slowdown in the growth of exports, and members decided that the statement should explicitly note that factor. In addition, data received over the intermeeting period indicated that inflation had declined, as the Committee had anticipated, and members agreed to update the statement to reflect their judgment that inflation was likely to remain near its recent low level in the near term. Members also judged that it was appropriate to note that market-based measures of inflation compensation remained near levels registered at the time of the January FOMC meeting.


The Committee agreed to maintain the target range for the federal funds rate at 0 to 1/4 percent and to reaffirm in the statement that the Committee’s decision about how long to maintain the current target range for the federal funds rate would depend on its assessment of actual and expected progress toward its objectives of maximum employment and 2 percent inflation. Members continued to judge that this assessment of progress would 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. In light of the considerable progress to date toward the Committee’s maximum-employment objective and the implications of that progress for the outlook for inflation, members agreed to remove from the forward guidance in the postmeeting statement the indication that the Committee judges that it can be patient in beginning to normalize the stance of monetary policy and to indicate instead that the Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term. Members viewed the new guidance as consistent with the outlook for policy that the Committee had expressed in January, and they agreed that the postmeeting statement should note that an increase in the target range for the federal funds rate remained unlikely at the April FOMC meeting; in addition, they generally saw the new language as providing the Committee with the flexibility to begin raising the target range for the federal funds rate in June or at a subsequent meeting. Members noted that the timing of the first increase would depend on the evolution of economic conditions and the outlook, and that the change in the forward guidance was not intended to indicate that the Committee had decided on the timing of the initial increase in the target range for the federal funds rate.


The Committee also decided to maintain its policy of reinvesting principal payments from 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. The Committee agreed to reiterate its expectation 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.


At the conclusion of the discussion, the Committee voted to authorize and direct the Federal Reserve Bank of New York, until it was instructed otherwise, to execute transactions in the SOMA in accordance with the following domestic policy directive:


“Consistent with its statutory mandate, the Federal Open Market Committee seeks monetary and financial conditions that will foster maximum employment and price stability. In particular, the Committee seeks conditions in reserve markets consistent with federal funds trading in a range from 0 to 1/4 percent. The Committee directs the Desk to undertake open market operations as necessary to maintain such conditions. The Committee directs the Desk to maintain its policy of rolling over maturing Treasury securities into new issues and its policy of reinvesting principal payments on all agency debt and agency mortgage-backed securities in agency mortgage-backed securities. The Committee also directs the Desk to engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve’s agency mortgage-backed securities transactions. The System Open Market Account manager and the secretary will keep the Committee informed of ongoing developments regarding the System’s balance sheet that could affect the attainment over time of the Committee’s objectives of maximum employment and price stability.”


The vote encompassed approval of the statement below to be released at 2:00 p.m.:


“Information received since the Federal Open Market Committee met in January suggests that economic growth has moderated somewhat. Labor market conditions have improved further, with strong job gains and a lower unemployment rate. A range of labor market indicators suggests that underutilization of labor resources continues to diminish. Household spending is rising moderately; declines in energy prices have boosted household purchasing power. Business fixed investment is advancing, while the recovery in the housing sector remains slow and export growth has weakened. Inflation has declined further below the Committee’s longer-run objective, largely reflecting declines in energy prices. Market-based measures of inflation compensation 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. 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. 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 energy price declines and other factors 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. Consistent with its previous statement, the Committee judges that an increase in the target range for the federal funds rate remains unlikely at the April FOMC meeting. The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term. This change in the forward guidance does not indicate that the Committee has decided on the timing of the initial increase in the target range.


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 this action: Janet L. Yellen, William C. Dudley, 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 this action: None.


It was agreed that the next meeting of the Committee would be held on Tuesday-Wednesday, April 28-29, 2015. The meeting adjourned at 10:45 a.m. on March 18, 2015


(por André Teixeira)


Fonte: Enfoque
Publicado em: 08/04/2015 15:10:53

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Confira a decisão do Fomc na íntegra (em inglês)


São Paulo, 28/01 (Enfoque) –

Information received since the Federal Open Market Committee met in December suggests that economic activity has been expanding at a solid pace.  Labor market conditions have improved further, with strong job gains and a lower unemployment rate.  On balance, a range of labor market indicators suggests that underutilization of labor resources continues to diminish.  Household spending is rising moderately; recent declines in energy prices have boosted household purchasing power.  Business fixed investment is advancing, while the recovery in the housing sector remains slow.  Inflation has declined further below the Committee’s longer-run objective, largely reflecting declines in energy prices.  Market-based measures of inflation compensation have declined substantially in recent months; 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.  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.  Inflation is anticipated to decline further 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 lower energy prices and other factors 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.  Based on its current assessment, the Committee judges that it can be patient in beginning to normalize the stance of monetary policy.  However, if incoming information indicates faster progress toward the Committee’s employment and inflation objectives than the Committee now expects, then increases in the target range for the federal funds rate are likely to occur sooner than currently anticipated.  Conversely, if progress proves slower than expected, then increases in the target range are likely to occur later than currently anticipated.

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

(por André Teixeira)


Fonte: Enfoque
Recebido em: 28/01/2015 17:09:38

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São Paulo, 29/10 (Enfoque) – Information received since the Federal Open Market Committee met in September suggests that economic activity is expanding at a moderate pace. Labor market conditions improved somewhat further, with solid job gains and a lower unemployment rate. On balance, a range of labor market indicators suggests that underutilization of labor resources is gradually diminishing. Household spending is rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow. Inflation has continued to run below the Committee’s longer-run objective. Market-based measures of inflation compensation have declined somewhat; 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. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators and inflation moving toward levels the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for economic activity and the labor market as nearly balanced. Although inflation in the near term will likely be held down by lower energy prices and other factors, the Committee judges that the likelihood of inflation running persistently below 2 percent has diminished somewhat since early this year.

The Committee judges that there has been a substantial improvement in the outlook for the labor market since the inception of its current asset purchase program. Moreover, the Committee continues to see sufficient underlying strength in the broader economy to support ongoing progress toward maximum employment in a context of price stability. Accordingly, the Committee decided to conclude its asset purchase program this month. 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.

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 developments. The Committee anticipates, based on its current assessment, that it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time following the end of its asset purchase program this month, especially if projected inflation continues to run below the Committee’s 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored. However, if incoming information indicates faster progress toward the Committee’s employment and inflation objectives than the Committee now expects, then increases in the target range for the federal funds rate are likely to occur sooner than currently anticipated. Conversely, if progress proves slower than expected, then increases in the target range are likely to occur later than currently anticipated.

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; Stanley Fischer; Richard W. Fisher; Loretta J. Mester; Charles I. Plosser; Jerome H. Powell; and Daniel K. Tarullo. Voting against the action was Narayana Kocherlakota, who believed that, in light of continued sluggishness in the inflation outlook and the recent slide in market-based measures of longer-term inflation expectations, the Committee should commit to keeping the current target range for the federal funds rate at least until the one-to-two-year ahead inflation outlook has returned to 2 percent and should continue the asset purchase program at its current level.


(por Gabriel Codas)


Fonte: Enfoque
Recebido em: 29/10/2014 16:04:24

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São Paulo, 17/09 (Enfoque) –

Information received since the Federal Open Market Committee met in July suggests that economic activity is expanding at a moderate pace. On balance, labor market conditions improved somewhat further; however, the unemployment rate is little changed and a range of labor market indicators suggests that there remains significant underutilization of labor resources. Household spending appears to be rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow. Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. Inflation has been running below the Committee’s longer-run objective. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators and inflation moving toward levels the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for economic activity and the labor market as nearly balanced and judges that the likelihood of inflation running persistently below 2 percent has diminished somewhat since early this year.

The Committee currently judges that there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions. In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions since the inception of the current asset purchase program, the Committee decided to make a further measured reduction in the pace of its asset purchases. Beginning in October, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $5 billion per month rather than $10 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $10 billion per month rather than $15 billion per month. 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. The Committee’s sizable and still-increasing holdings of longer-term securities should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative, which in turn should promote a stronger economic recovery and help to ensure that inflation, over time, is at the rate most consistent with the Committee’s dual mandate.

The Committee will closely monitor incoming information on economic and financial developments in coming months and will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. If incoming information broadly supports the Committee’s expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective, the Committee will end its current program of asset purchases at its next meeting. However, asset purchases are not on a preset course, and the Committee’s decisions about their pace will remain contingent on the Committee’s outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of such purchases.

To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that a highly accommodative stance of monetary policy remains appropriate. In determining how long to maintain the current 0 to 1/4 percent target range for the federal funds rate, 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 developments. The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee’s 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored.

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; Stanley Fischer; Narayana Kocherlakota; Loretta J. Mester; Jerome H. Powell; and Daniel K. Tarullo. Voting against the action were Richard W. Fisher and Charles I. Plosser. President Fisher believed that the continued strengthening of the real economy, improved outlook for labor utilization and for general price stability, and continued signs of financial market excess, will likely warrant an earlier reduction in monetary accommodation than is suggested by the Committee’s stated forward guidance. President Plosser objected to the guidance indicating that it likely will be appropriate to maintain the current target range for the federal funds rate for “a considerable time after the asset purchase program ends,” because such language is time dependent and does not reflect the considerable economic progress that has been made toward the Committee’s goals.

Policy Normalization Principles and Plans

During its recent meetings, the Federal Open Market Committee (FOMC) discussed ways to normalize the stance of monetary policy and the Federal Reserve’s securities holdings. The discussions were part of prudent planning and do not imply that normalization will necessarily begin soon. The Committee continues to judge that many of the normalization principles that it adopted in June 2011 remain applicable. However, in light of the changes in the System Open Market Account (SOMA) portfolio since 2011 and enhancements in the tools the Committee will have available to implement policy during normalization, the Committee has concluded that some aspects of the eventual normalization process will likely differ from those specified earlier. The Committee also has agreed that it is appropriate at this time to provide additional information regarding its normalization plans. All FOMC participants but one agreed on the following key elements of the approach they intend to implement when it becomes appropriate to begin normalizing the stance of monetary policy:

The Committee will determine the timing and pace of policy normalization–meaning steps to raise the federal funds rate and other short-term interest rates to more normal levels and to reduce the Federal Reserve’s securities holdings–so as to promote its statutory mandate of maximum employment and price stability.

When economic conditions and the economic outlook warrant a less accommodative monetary policy, the Committee will raise its target range for the federal funds rate.

During normalization, the Federal Reserve intends to move the federal funds rate into the target range set by the FOMC primarily by adjusting the interest rate it pays on excess reserve balances.

During normalization, the Federal Reserve intends to use an overnight reverse repurchase agreement facility and other supplementary tools as needed to help control the federal funds rate. The Committee will use an overnight reverse repurchase agreement facility only to the extent necessary and will phase it out when it is no longer needed to help control the federal funds rate.

The Committee intends to reduce the Federal Reserve’s securities holdings in a gradual and predictable manner primarily by ceasing to reinvest repayments of principal on securities held in the SOMA.

The Committee expects to cease or commence phasing out reinvestments after it begins increasing the target range for the federal funds rate; the timing will depend on how economic and financial conditions and the economic outlook evolve.

The Committee currently does not anticipate selling agency mortgage-backed securities as part of the normalization process, although limited sales might be warranted in the longer run to reduce or eliminate residual holdings. The timing and pace of any sales would be communicated to the public in advance.

The Committee intends that the Federal Reserve will, in the longer run, hold no more securities than necessary to implement monetary policy efficiently and effectively, and that it will hold primarily Treasury securities, thereby minimizing the effect of Federal Reserve holdings on the allocation of credit across sectors of the economy.

The Committee is prepared to adjust the details of its approach to poli


(por André Teixeira)


Fonte: Enfoque
Recebido em: 17/09/2014 15:08:21

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São Paulo, 30/07 (Enfoque) –

agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee’s sizable and still-increasing holdings of longer-term securities should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative, which in turn should promote a stronger economic recovery and help to ensure that inflation, over time, is at the rate most consistent with the Committee’s dual mandate.


The Committee will closely monitor incoming information on economic and financial developments in coming months and will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. If incoming information broadly supports the Committee’s expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective, the Committee will likely reduce the pace of asset purchases in further measured steps at future meetings. However, asset purchases are not on a preset course, and the Committee’s decisions about their pace will remain contingent on the Committee’s outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of such purchases.


To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that a highly accommodative stance of monetary policy remains appropriate. In determining how long to maintain the current 0 to 1/4 percent target range for the federal funds rate, 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 developments. The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee’s 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored.


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; Stanley Fischer; Richard W. Fisher; Narayana Kocherlakota; Loretta J. Mester; Jerome H. Powell; and Daniel K. Tarullo. Voting against was Charles I. Plosser who objected to the guidance indicating that it likely will be appropriate to maintain the current target range for the federal funds rate for “a considerable time after the asset purchase program ends,” because such language is time dependent and does not reflect the considerable economic progress that has been made toward the Committee’s goals.



(por Gabriel Codas)


Fonte: Enfoque
Recebido em: 30/07/2014 15:07:49

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Confira a decisão do Fomc na íntegra (em inglês)


Information received since the Federal Open Market Committee met in August indicates that economic growth remains slow. Recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated. Household spending has been increasing at only a modest pace in recent months despite some recovery in sales of motor vehicles as supply-chain disruptions eased. Investment in nonresidential structures is still weak, and the housing sector remains depressed. However, business investment in equipment and software continues to expand. Inflation appears to have moderated since earlier in the year as prices of energy and some commodities have declined from their peaks. Longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee continues to expect some pickup in the pace of recovery over coming quarters but anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Moreover, there are significant downside risks to the economic outlook, including strains in global financial markets. The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee’s dual mandate as the effects of past energy and other commodity price increases dissipate further. However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.
To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee decided today to extend the average maturity of its holdings of securities. The Committee intends to purchase, by the end of June 2012, $400 billion of Treasury securities with remaining maturities of 6 years to 30 years and to sell an equal amount of Treasury securities with remaining maturities of 3 years or less. This program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.
To help support conditions in mortgage markets, the Committee will now reinvest principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. In addition, the Committee will maintain its existing policy of rolling over maturing Treasury securities at auction.
The Committee also decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.
The Committee discussed the range of policy tools available to promote a stronger economic recovery in a context of price stability. It will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen. Voting against the action were Richard W. Fisher, Narayana Kocherlakota, and Charles I. Plosser, who did not support additional policy accommodation at this time.


Fonte: Enfoque Informações Financeiras

Recebido em:
21/09/2011 15:27:23

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Confira a decisão do Fomc na íntegra (em inglês)

Information received since the Federal Open Market Committee met in June indicates that economic growth so far this year has been considerably slower than the Committee had expected.  Indicators suggest a deterioration in overall labor market conditions in recent months, and the unemployment rate has moved up.  Household spending has flattened out, investment in nonresidential structures is still weak, and the housing sector remains depressed.  However, business investment in equipment and software continues to expand.  Temporary factors, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan, appear to account for only some of the recent weakness in economic activity.  Inflation picked up earlier in the year, mainly reflecting higher prices for some commodities and imported goods, as well as the supply chain disruptions.  More recently, inflation has moderated as prices of energy and some commodities have declined from their earlier peaks.  Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability.  The Committee now expects a somewhat slower pace of recovery over coming quarters than it did at the time of the previous meeting and anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate.  Moreover, downside risks to the economic outlook have increased. The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee’s dual mandate as the effects of past energy and other commodity price increases dissipate further.  However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.

To promote the ongoing economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent.  The Committee currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.  The Committee also will maintain its existing policy of reinvesting principal payments from its securities holdings.  The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.

The Committee discussed the range of policy tools available to promote a stronger economic recovery in a context of price stability.  It will continue to assess the economic outlook in light of incoming information and is prepared to employ these tools as appropriate.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen.

Voting against the action were: Richard W. Fisher, Narayana Kocherlakota, and Charles I. Plosser, who would have preferred to continue to describe economic conditions as likely to warrant exceptionally low levels for the federal funds rate for an extended period.

 



Fonte: Enfoque Informações Financeiras

Recebido em:
09/08/2011 15:21:16

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Confira a decisão do Fomc na íntegra, em inglês

For immediate release

Information received since the Federal Open Market Committee met in April indicates that the economic recovery is continuing at a moderate pace, though somewhat more slowly than the Committee had expected.  Also, recent labor market indicators have been weaker than anticipated.  The slower pace of the recovery reflects in part factors that are likely to be temporary, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan.  Household spending and business investment in equipment and software continue to expand.  However, investment in nonresidential structures is still weak, and the housing sector continues to be depressed.  Inflation has picked up in recent months, mainly reflecting higher prices forsome commodities and imported goods, as well as the recent supply chain disruptions. However, longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability.  The unemployment rate remains elevated; however, the Committee expects the pace of recovery to pick up over coming quarters and the unemployment rate to resume its gradual decline toward levels that the Committee judges to be consistent with its dual mandate.  Inflation has moved up recently, but the Committee anticipates that inflation will subside to levels at or below those consistent with the Committee’s dual mandate as the effects of past energy and other commodity price increases dissipate.  However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations. 

To promote the ongoing economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent.  The Committee continues to anticipate that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate for an extended period.  The Committee will complete its purchases of $600 billion of longer-term Treasury securities by the end of this month and will maintain its existing policy of reinvesting principal payments from its securities holdings.  The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate. 

The Committee will monitor the economic outlook and financial developments and will act as needed to best foster maximum employment and price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen.



Fonte: Enfoque Informações Financeiras

Recebido em:
22/06/2011 13:31:04

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Confira a decisão do Fomc na íntegra (em inglês)

Information received since the Federal Open Market Committee met in December confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions. Growth in household spending picked up late last year, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, while investment in nonresidential structures is still weak. Employers remain reluctant to add to payrolls. The housing sector continues to be depressed. Although commodity prices have risen, longer-term inflation expectations have remained stable, and measures of underlying inflation have been trending downward.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Currently, the unemployment rate is elevated, and measures of underlying inflation are somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. Although the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, progress toward its objectives has been disappointingly slow.

To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to continue expanding its holdings of securities as announced in November. In particular, the Committee is maintaining its existing policy of reinvesting principal payments from its securities holdings and intends to purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.

The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.



Fonte: Enfoque Informações Financeiras

Recebido em:
26/01/2011 17:21:46

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Confira a decisão do Fomc na íntegra (em inglês)

Information received since the Federal Open Market Committee met in November confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring down unemployment. Household spending is increasing at a moderate pace, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls. The housing sector continues to be depressed. Longer-term inflation expectations have remained stable, but measures of underlying inflation have continued to trend downward.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Currently, the unemployment rate is elevated, and measures of underlying inflation are somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. Although the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, progress toward its objectives has been disappointingly slow.

To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to continue expanding its holdings of securities as announced in November. The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings. In addition, the Committee intends to purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.

The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Sandra Pianalto; Sarah Bloom Raskin; Eric S. Rosengren; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.

Voting against the policy was Thomas M. Hoenig. In light of the improving economy, Mr. Hoenig was concerned that a continued high level of monetary accommodation would increase the risks of future economic and financial imbalances and, over time, would cause an increase in long-term inflation expectations that could destabilize the economy.



Fonte:Enfoque Informações Financeiras Ltda.

Recebido em:
14/12/2010 17:17:01

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Confira a decisão do Fomc na íntegra (em inglês)

Information received since the Federal Open Market Committee met in June indicates that the pace of recovery in output and employment has slowed in recent months. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising; however, investment in nonresidential structures continues to be weak and employers remain reluctant to add to payrolls. Housing starts remain at a depressed level. Bank lending has continued to contract. Nonetheless, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be more modest in the near term than had been anticipated.

Measures of underlying inflation have trended lower in recent quarters and, with substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.

To help support the economic recovery in a context of price stability, the Committee will keep constant the Federal Reserve’s holdings of securities at their current level by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities.1 The Committee will continue to roll over the Federal Reserve’s holdings of Treasury securities as they mature.

The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Donald L. Kohn; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh.

Voting against the policy was Thomas M. Hoenig, who judges that the economy is recovering modestly, as projected. Accordingly, he believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted and limits the Committee’s ability to adjust policy when needed. In addition, given economic and financial conditions, Mr. Hoenig did not believe that keeping constant the size of the Federal Reserve’s holdings of longer-term securities at their current level was required to support a return to the Committee’s policy objectives.

 


1. The Open Market Desk will issue a technical note shortly after the statement providing operational details on how it will carry out these transactions.



Fonte:Enfoque Informações Financeiras Ltda.

Recebido em:
10/08/2010 15:17:59

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