FED raised rates to 1.50%

As expected, FED raised rates for 0.25 points, from 1.25 to 1.50% today. Here is the FOMC statement and economic projections.

Information received since the Federal Open Market Committee met in November indicates that the labor market has continued to strengthen and that economic activity has been rising at a solid rate. Averaging through hurricane-related fluctuations, job gains have been solid, and the unemployment rate declined further. Household spending has been expanding at a moderate rate, and growth in business fixed investment has picked up in recent quarters. On a 12-month basis, both overall inflation and inflation for items other than food and energy have declined this year and are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Hurricane-related disruptions and rebuilding have affected economic activity, employment, and inflation in recent months but have not materially altered the outlook for the national economy. Consequently, the Committee continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will remain strong. Inflation on a 12‑month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the Committee’s 2 percent objective over the medium term. Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.

In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1-1/4 to 1‑1/2 percent. The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

Voting for the FOMC monetary policy action were Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Patrick Harker; Robert S. Kaplan; Jerome H. Powell; and Randal K. Quarles. Voting against the action were Charles L. Evans and Neel Kashkari, who preferred at this meeting to maintain the existing target range for the federal funds rate.

Implementation Note issued December 13, 2017

Federal Reserve Board and Federal Open Market Committee release economic projections from the December 12-13 FOMC meeting

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One comment

  • Pozdrav maistore !!
    Nadam se da si dobro i da sve ide u smjeru kojeg ocekujes!! Uvjek je preljepo procitati tvoj post i vidjeti tvoje opsirne analize,inace vec dva tjedna ocekujem jos neki veci pomak tj rast USD-a u paru EUR-USD do N. GOD.pa sam bio konstantno u cekanju ali market (TRZISTE ) je odlucijo drugacije! Drzati cjenu u nekom rasponu i kretati se cik-cak sa zatvaranjem dana sve nize i nize ali zanemarivo u pipovima! Tako da nakon ovih predvidajucih odluka FED-a i ECB-a nije bilo osvojenih pipova ! Ali nema predaje,lagani poticaj USD-u daje porezna reforma koja bi mogla biti usvojena do 22.12 17 i USD bi mogao ustati bar pri kraju godine! Ako cjena padne ispod 1.16 60 opet se otvara formacija ( GLAVA I RAMENA ) te ce se otvoriti put za 1.15 50 a ako prodaju trziste pihvati mozda i 1.14 -1.12 80! I to bi bio moj zadnji trade u pravcu favoriziranja USD-a,jer mislim da ce se stvari izmjeniti u 2018 mozda ne odmah u 1. mjesecu ali do kraja 2018 ako program ECB-a zavrsi u 9. mjesecu cjena bi se mogla kretati od 1.20 do 1.30! Ova nadolazeca god. mogla bi biti vrlo uspjesna za trejdere jer se sad EUR-o nalazi u pozicij kao USD kad je FED napustao svoj program prije nekoliko godina! Na samu najavu zavrsetka programa USD je skocio i godinama gazio sve pred sobom do pocetka 2017 gdje je dno ostalo na 1.03 50! Uvjek ima nepredvidivih situacija,ali prijatelji moji mislim da od 2018 – 2020 pored kupnje GBP koju ste vec morali realizirat EUR-GBP na ( 0.93) mozda se jos jednom ponovi taj tecaj BREXIT jos nije definiran,dakle sljedecih god.ako kupujete EUR u paru s USD ili nekim drugim instrumentima u duzim vremen.periodima (mjesec ili vise) ili kracim ne (minuta, sat) ne bi trebali gubiti vec ostvarivati konstantno profit,naravno ako poluga nije za ubit vola !!!

    Mario moj,veliki pozdrav tebi i svim tvojim korisnicima tvojih usluga !!! L . P .

    Like

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