Information received since the Federal Open Market Committee met in July suggests that economic activity has strongly recovered from the soft patch in the first quarter. Labor market conditions are steadily improving. The unemployment rate is declining and while wages are rising, they need to continue to rise to support consumer spending and savings. The Committee anticipates that inflation over the medium term likely will run at or below its 2 percent objective. Longer-term inflation expectations have remained stable.
For continued progress toward a self-sustaining steady state growth rate in the context of maximum employment and price stability, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored.
In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments consistent with its longer-run goals of maximum employment and inflation of 2 percent.
The Committee is ending its existing policy of rolling over maturing Treasury securities at auction. To ensure that the money supply is put to its most productive uses, the Committee has decided to stop paying interest on excess reserves.
Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Charles L. Evans; Stanley Fischer; Jeffrey M. Lacker; Dennis P. Lockhart; Jerome H. Powell; Daniel K. Tarullo; and John C. Williams. Voting against were none.