The Federal Reserve hiked rates by 25 bps on March 22 after a tumultuous period for regional banks. I always find it’s good practice to re-read the previous FOMC statement just before a new one is released.
Federal Reserve issues FOMC statement
Recent indicators point to modest growth in spending and production.
Job gains have picked up in recent months and are running at a robust
pace; the unemployment rate has remained low. Inflation remains
elevated.
The U.S. banking system is sound and resilient. Recent developments
are likely to result in tighter credit conditions for households and
businesses and to weigh on economic activity, hiring, and inflation. The
extent of these effects is uncertain. The Committee remains highly
attentive to inflation risks.
The Committee seeks to achieve maximum employment and inflation at
the rate of 2 percent over the longer run. In support of these goals,
the Committee decided to raise the target range for the federal funds
rate to 4-3/4 to 5 percent. The Committee will closely monitor incoming
information and assess the implications for monetary policy. The
Committee anticipates that some additional policy firming may be
appropriate in order to attain a stance of monetary policy that is
sufficiently restrictive to return inflation to 2 percent over time. In
determining the extent of future increases in the target range, the
Committee will take into account the cumulative tightening of monetary
policy, the lags with which monetary policy affects economic activity
and inflation, and economic and financial developments. In addition, the
Committee will continue reducing its holdings of Treasury securities
and agency debt and agency mortgage-backed securities, as described in
its previously announced plans. The Committee is strongly committed to
returning inflation to its 2 percent objective.
In assessing the appropriate stance of monetary policy, the Committee
will continue to monitor the implications of incoming information for
the economic outlook. The Committee would be prepared to adjust the
stance of monetary policy as appropriate if risks emerge that could
impede the attainment of the Committee’s goals. The Committee’s
assessments will take into account a wide range of information,
including readings on labor market conditions, inflation pressures and
inflation expectations, and financial and international developments.
Voting for the monetary policy action were Jerome H. Powell, Chair;
John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lisa
D. Cook; Austan D. Goolsbee; Patrick Harker; Philip N. Jefferson; Neel
Kashkari; Lorie K. Logan; and Christopher J. Waller.