WASHINGTON–The Federal Open Market Committee ended its November two-day meeting Thursday, and as expected, the committee did not move interest rates higher.
However, most analysts are looking for the last rate hike of 2018 to come at the December meeting with some gradual tightening seeming likely in 2019.
“There were no substantive changes in the FOMC’s statement as compared to the previous one in September,” stated NAFCU Chief Economist Curt Long. “The economy remains on solid footing overall, the labor market is strong, and inflation has settled near the Fed’s target. These conditions should allow the Fed to maintain its once-per-quarter pace of rate hikes, with the next one coming in December.”
In its released statement, the FOMC said information received since the committee met in September indicates that “the labor market has continued to strengthen and that economic activity has been rising at a strong rate. Job gains have been strong, on average, in recent months, and the unemployment rate has declined. Household spending has continued to grow strongly, while growth of business fixed investment has moderated from its rapid pace earlier in the year. On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2%. Indicators of longer-term inflation expectations are little changed, on balance.”
The FOMC said that 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% 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.”