WASHINGTON–While eyes remain on the Fed and when it might move on rates, minutes from the June Federal Open Market Committee meeting show the economy has been expanding “moderately” in recent months.
As for rates, the Fed said that to support continued progress toward maximum employment and price stability, the current 0% to 0.25% target range for the federal funds rate remains appropriate.
“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 Fed said as it released details of the June meeting. “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.”
The FOMC said it anticipates that “with appropriate accommodation” the 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,” the Fed said. “Inflation is anticipated to remain near its recent low level in the near term, but the Committee expects inflation to rise gradually toward 2% over the medium term as the labor market improves further and the transitory effects of earlier declines in energy and import prices dissipate.”