WASHINGTON–As expected, the Federal Open Market Committee has moved to raise rates. It has now set the target range for the federal funds rate to 1.75% to 2%.
“Information received since the Federal Open Market Committee met in May indicates that the labor market has continued to strengthen and that economic activity has been rising at a solid rate,” the Fed said in a statement. “Job gains have been strong, on average, in recent months, and the unemployment rate has declined. Recent data suggest that growth of household spending has picked up, while business fixed investment has continued to grow strongly. On a 12-month basis, both overall inflation and inflation for items other than food and energy have moved close to 2 percent. Indicators of longer-term inflation expectations are little changed, on balance.”
The Fed said it made the move to fulfill its statutory mandate to foster maximum employment and price stability, a dual mission at least one analyst said is becoming increasingly impossible, as CUToday.info reported here.
“The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2% objective over the medium term,” the FOMC said in its statement. “Risks to the economic outlook appear roughly balanced.”
Voting for the FOMC monetary policy action were Jerome H. Powell, Chairman; William C. Dudley, Vice Chairman; Thomas I. Barkin; Raphael W. Bostic; Lael Brainard; Loretta J. Mester; Randal K. Quarles and John C. Williams.