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Economy in Brief

FOMC Leaves Rates Unchanged but Suggests Gradual Increases Ahead
by Tom Moeller  September 20, 2017

At today's meeting of the Federal Open Market Committee, the targeted federal funds rate was held steady in a range of 1.00% to 1.25%. This followed two rate increases earlier this year.

Additionally, the Fed stated that "The Committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate." Nevertheless, the Fed stated that the rate will remain below its long-run level.

As the economy recovers from the effects of Hurricanes Harvey, Irma and Maria, economic growth is expected to continue at a moderate pace and labor markets will improve.

Price inflation is expected to pick up due to higher gasoline prices, then recede to the Fed's two percent objective.

The Fed also indicated that its balance sheet restructuring will begin next month.

Updated economic projections include GDP growth of 2.4% in 2017, 2.1% in 2018, 2.0% in 2019 and 1.8% in 2020. Core CPI growth of 1.5% is expected this year, 1.9% in 2018, then 2.0% in 2019 and 2020. An unemployment rate of 4.3% is projected this year, 4.1% in 2018 and 2019, then 4.2% in 2020.

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

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

Current Last 2016 2015 2014 2013
Federal Funds Rate Target 1.00%-1.25% 1.00%-1.25% 0.40% 0.13% 0.09% 0.11%
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