Federal Reserve Board – Federal Reserve Issues FOMC Statement

Current indicators suggest that economic activity continues to expand at a solid pace. Since the beginning of the year, labor market conditions have generally eased and the unemployment rate has increased but remains low. Inflation has made progress toward the committee’s 2 percent target but remains somewhat elevated.

The committee is aiming for maximum employment and inflation of 2 percent in the longer term. The Committee considers that the risks to achieving its employment and inflation targets are roughly balanced. The economic outlook is uncertain and the Committee is aware of the risks that its dual mandate poses for both sides.

To support its goals, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 4-1/4 to 4-1/2 percent. In considering the scope and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess the incoming data, the evolving outlook, and the balance of risks. The Committee will continue to reduce its holdings of Treasury securities, government debt and mortgage-backed securities. The Committee is strongly committed to supporting peak employment and returning inflation to its 2 percent target.

In assessing the appropriate monetary policy stance, the Committee will continue to monitor the impact of incoming information on the economic outlook. The Committee would be prepared to adjust the monetary policy stance as appropriate if risks arise that could impede the achievement of the Committee’s objectives. The Committee’s assessments take into account a wide range of information, including insights into labor market conditions, inflation pressures and expectations, and financial and international developments.

Voting in favor of the monetary policy measure were Jerome H. Powell, Chairman; John C. Williams, vice chairman; Thomas I Barkin; Michael S Barr; Raphael W. Bostic; Michelle W. Bowman; Lisa D Cook; Mary C. Daly; Philip N. Jefferson; Adriana D. Kugler; and Christopher J. Waller. Voting against the measure was Beth M. Hammack, who favored keeping the target range for the federal funds rate at 4-1/2 to 4-3/4 percent.

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Implementation note dated December 18, 2024