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The Federal Reserve as expected kept rates at at 1.50%-1.75%, as expected after a two day meeting on Wednesday with Jerome Powell as Chairman. Markets had priced in a 97% chance of no Change. Leaves forecasts for GDP and inflation unchanged, lowers unemployment.

 Fed Boardroom

Federal Reserve December FOMC Meeting 

Federal Reserve Announcement Wed 11 December 2019 14:00:00 ET

FOMC Benchmark Interest Rate Unchanged Target Range To 1.50-1.75%

Interest Rate On Excess Reserves 1.55% 

Highlights

  • At the prior decision on October 30, the Fed cut rates 25 bps
  • The market has priced in virtually no chance of rate move through February
  • IOER 1.55% vs 1.55% prior
  • Fed drops language about 'uncertainties about this outlook remain'
  • Vote was unanimous
  • "The Committee will continue to monitor the implications of incoming information for the economic outlook, including global developments and muted inflation pressures, as it assesses the appropriate path of the target range for the federal funds rate"
  • No changes in the economic outlook paragraph
  • Says "the current stance of monetary policy is appropriate"
  • Leaves forecasts for GDP and inflation unchanged, lowers unemployment
  • Median forecast is for one rate hike in 2021 and one in 2022

FOMC Statement and Press Conference December 11, 2019 14:30 ET

December 11, 2019 Federal Reserve issues FOMC statement For release at 2:00 p.m.EDT

Information received since the Federal Open Market Committee met in October indicates that the labor market remains strong and that economic activity has been rising at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low. Although household spending has been rising at a strong pace, business fixed investment and exports remain weak. On a 12‑month basis, overall inflation and inflation for items other than food and energy are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee decided to maintain the target range for the federal funds rate at 1‑1/2 to 1-3/4 percent. The Committee judges that the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective. The Committee will continue to monitor the implications of incoming information for the economic outlook, including global developments and muted inflation pressures, as it assesses the appropriate path of the target range for the federal funds rate.

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 maximum employment objective and its symmetric 2 percent inflation objective. 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.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; James Bullard; Richard H. Clarida; Charles L. Evans; Esther L. George; Randal K. Quarles; and Eric S. Rosengren.

Implementation Note issued December 11, 2019

Federal Reserve December FOMC Statement Changes via RANsquawk @RANsquawk

 

 

 

 

 

Source: Federal Reserve

From the TradersCommunity Research Des

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