It’s always a good idea to re-read the prior FOMC statement before the new one is published. Don’t expect the Warsh Fed to offer much in the way of guidance.
The Federal Open Market Committee approved the following statement for release by a 12 – 0 vote:
The Committee decided to raise the target range for the federal funds rate by 1/4 percentage pointto 3-3/4to 4 percent, in support of the Federal Reserve’s dual mandate. The Committee is continuing its policy of maintaining ample reserves in the banking system.
Economic activity is expanding at a solid pace. While uncertainty remains elevated owing, in part, to geopolitical developments,domestic spending has been resilient. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little.
Inflation remains elevated. Today’s policy action will support a timelier return to the Committee’s 2 percent goal. The Committee will deliver price stability.
It’s also worth noting that back in July, the three dissents in the 9-3 vote were from Hammack, Kashkari and Logan. Eyes will be on those three (and more) if we get a hold today. Pricing is at just 7% for a surprise hike.
This article was written by Adam Button at investinglive.com.