Recent indicators suggest that the economy grew significantly in the third quarter, although job gains have slowed compared to earlier in the year. However, the unemployment rate remains low, and there is still a concern about high levels of inflation.
Despite some concerns, the U.S. banking system is stable and resilient. However, tighter financial conditions for households and businesses are expected to have a negative impact on economic activity, hiring, and inflation. The extent of these effects is uncertain, and the committee is closely monitoring inflation risks.
The committee’s main objectives are to achieve maximum employment and maintain inflation at a rate of 2 percent in the long term. Therefore, they have decided to keep the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. The committee will continue to assess new information and its impact on monetary policy. They will consider factors such as the cumulative effect of tightening monetary policy, the time it takes for monetary policy to affect the economy and inflation, and economic and financial developments. The committee will also continue to reduce its holdings of certain securities as previously planned, as it is committed to returning inflation to its target of 2 percent.
The committee will continue to analyze incoming information to determine the appropriate monetary policy stance and make adjustments if necessary to achieve its goals. They will consider various factors, including labor market conditions, inflation pressures and expectations, and financial and international developments.
The voting members in favor of this monetary policy action were 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.
