The US Federal Reserve’s open market committee resolved overnight to keep the target range for the federal funds rate at 1.5-1.75%.
The central reason: “The stance of monetary policy remains accommodative, thereby supporting strong labour market conditions & a sustained return to 2% inflation.”
You’ve been able to read the same lines for years, with only cautious changes in the interest rate. The one new term in the 6-weekly statement is the word symmetric, tossed in twice. I can’t see the reason for it.
The main US means of manipulating a steady position over the 10 years since the global financial crisis erupted has been to increase public debt, which the US Debt Clock website now has at $US21.17 trillion. The website says the US has $US113 trillion of unfunded liabilities, a $US6 trillion federal budget deficit based on generally accepted accounting principles, a $US931,000 liability for every taxpayer and 39 million people living in poverty.
The central bank committee responsible for final decisions said:
“Information received since the committee met in March indicates that the labour market has continued to strengthen and that economic activity has been rising at a moderate rate. Job gains have been strong, on average, in recent months, and the unemployment rate has stayed low. Recent data suggest that growth of household spending moderated from its strong fourth-quarter pace, while business fixed investment continued to grow strongly. On a 12-month basis, both overall inflation & inflation for items other than food & energy have moved close to 2%. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.
“Consistent with its statutory mandate, the committee seeks to foster maximum employment & price stability. The committee expects that, with further gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace in the medium term and labour market conditions will remain strong. Inflation on a 12-month basis is expected to run near the committee’s symmetric 2% objective over the medium term. Risks to the economic outlook appear roughly balanced.
“In view of realised & expected labour market conditions & inflation, the committee decided to maintain the target range for the federal funds rate at 1.5-1.75%.
“In determining the timing & size of future adjustments to the target range for the federal funds rate, the committee will assess realised & expected economic conditions relative to its objectives of maximum employment & 2% inflation. This assessment will take into account a wide range of information, including measures of labour market conditions, indicators of inflation pressures & inflation expectations, and readings on financial & international developments.
“The committee will carefully monitor actual & expected inflation developments relative to its symmetric inflation goal. The committee expects that economic conditions will evolve in a manner that will warrant further 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.”
Link: US Debt Clock
Attribution: Bank release.