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Economy in Brief

FOMC Leaves Rate Unchanged; Notes Global Economic Risks & Low Inflation
by Tom Moeller  March 16, 2016

At today's meeting of the Federal Open Market Committee, the Fed funds rate was left unchanged in the range of 0.25% - 0.50%. The Fed again emphasized that "global economic and financial developments continue to pose risks." It also stated, "In light of the current shortfall of inflation from 2 percent, the Committee will carefully monitor actual and progress toward its inflation goal."

Looking forward, the Fed again indicated that "the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run."

Updated economic projections foresaw GDP growth of 2.2% this year, then 2.1% in 2017 and 2.0% in 2018. These figures were scaled back from 2.4%, 2.2% and 2.0%, respectively. "Core" PCE price inflation of 1.6% this year, then 1.8% in 2017 and 2.0% in 2018 compared to 1.6%, 1.9% and 2.0%. The unemployment rate forecast for 2017 was pared to 4.6% from 4.7%, and for 2018 it was reduced to 4.5% from 4.7%.

The press release for today's FOMC meeting can be found here.

The economic backdrop today's to today's meeting contained a February decline in the Fed's Labor Market Conditions Index, as well as an upturn in growth in the "core" PCE price index.

Haver's SURVEYS database contains the economic projections from the Federal Reserve Board.

Current Last 2014 2013 2012 2011
Federal Funds Rate, % (Target) 0.25-0.50 0.00-0.25 0.09 0.11 0.14 0.10
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