Recent indicators point to a strong expansion of economic activity, although job gains have slowed down in recent months, they still remain robust, and the unemployment rate remains low. However, inflation remains high.
The U.S. banking system is stable and resilient. However, tighter credit conditions for households and businesses may have a negative impact on economic activity, hiring, and inflation. The exact extent of these effects is still uncertain. The Committee is closely monitoring the risks associated with inflation.
The Committee’s objective is to achieve maximum employment and maintain inflation at a rate of 2 percent in the long term. To support these goals, the Committee has decided to keep the federal funds rate target range at 5-1/4 to 5-1/2 percent. The Committee will continue to evaluate additional information and its implications for monetary policy. When considering the appropriate level of policy tightening to bring inflation back to 2 percent, the Committee will take into account the cumulative tightening of monetary policy, the time it takes for monetary policy to impact economic activity and inflation, and economic and financial developments. Additionally, the Committee will continue to reduce its holdings of Treasury securities and agency debt and mortgage-backed securities, as previously announced. The Committee is strongly dedicated to achieving the 2 percent inflation objective.
In evaluating the appropriate direction of monetary policy, the Committee will continue to monitor how incoming information affects the economic outlook. If risks emerge that could hinder the achievement of the Committee’s objectives, the Committee is prepared to adjust the stance of monetary policy accordingly. These assessments will consider a wide range of information, including labor market conditions, inflation pressures and expectations, and domestic and international developments.
The following individuals voted for the monetary policy action: 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; Adriana D. Kugler; Lorie K. Logan; and Christopher J. Waller.
Read the original Federal Reserve release here.