Recent indicators suggest that the economy has been growing at a steady pace, with robust job gains and a low unemployment rate. However, inflation remains high.
The U.S. banking system is strong and resilient, but tighter credit conditions for households and businesses are likely to have a negative impact on the economy, hiring, and inflation. The extent of these effects is uncertain, but the Committee is closely monitoring inflation risks.
The Committee’s objective is to achieve maximum employment and a 2 percent inflation rate in the long term. In order to support these goals, the Committee has decided to raise the target range for the federal funds rate to between 5-1/4 and 5-1/2 percent. The Committee will continue to evaluate new information and its implications for monetary policy. When determining the need for further policy tightening to bring inflation back to 2 percent, the Committee will consider the cumulative impact of previous tightening, as well as the time it takes for monetary policy to affect economic activity and inflation, along with economic and financial developments. Additionally, the Committee will continue to reduce its holdings of Treasury securities and mortgage-backed securities as previously announced. The Committee is fully committed to achieving its objective of 2 percent inflation.
The Committee will closely analyze incoming information regarding the economic outlook in order to determine the appropriate stance of monetary policy. If any risks arise that could hinder the Committee’s goals, it is prepared to adjust monetary policy accordingly. The Committee will consider various factors, including labor market conditions, inflation pressures and expectations, and financial and international developments.
Members of the Committee who voted for the monetary policy action included Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lisa D. Cook; Austan D. Goolsbee; Patrick Harker; Philip N. Jefferson; Neel Kashkari; Lorie K. Logan; and Christopher J. Waller.
Read the original Federal Reserve release here.
