Committee lowered federal funds rate by 25bps to 3.5-3.75%. Near-term risks: inflation tilted upside, employment tilted downside. Tariff effects expected to be short-lived, one-time price level shift.
Jerome Powell
With today's decision, policy rate lowered by 75bps over last three meetings. This normalization should stabilize labor market while allowing inflation to resume downward trend toward 2%.
Jerome Powell
Median participant projects appropriate fed funds rate at 3.4% end of 2026, 3.1% end of 2027 (unchanged from September). Monetary policy not on preset course, decisions meeting-by-meeting.
Jerome Powell
Committee initiating purchases of shorter-term Treasury securities (mainly bills) at $40B first month to maintain ample reserves. Standing repo operations aggregate limit eliminated to support policy implementation.
Jerome Powell
Fed remains committed to maximum employment, bringing inflation sustainably to 2%, keeping longer-term inflation expectations anchored.
Does insertion of 'considering the extent and timing of additional adjustments' indicate Fed is now on hold until clearer signal from inflation, jobs, or economy?
Howard Schneider
Jerome Powell
Yes, adjustments since September bring policy within broad range of neutral estimates. Well positioned to determine extent and timing of additional adjustments based on incoming data, evolving outlook, balance of risks.