The Federal Reserve raised interest rates by 25 basis points on March 22 after a turbulent period for regional banks. I always find it a good practice to re-read a previous FOMC statement before issuing a new one.
The Federal Reserve releases the Federal Open Market Committee statement
Recent indicators point to modest growth in spending and production. Job gains have rebounded in recent months and are on a solid pace; The unemployment rate remained low. Inflation is still high.
The US banking system is sound and resilient. Recent developments are likely to lead to tighter credit conditions for households and businesses and affect economic activity, employment and inflation. The extent of these effects is uncertain. The committee remains very concerned about inflation risks.
The committee seeks to achieve maximum employment and inflation at 2% over the long term. In support of these goals, the committee decided to raise the target range for the federal funds rate to 4-3/4 to 5%. The committee will closely monitor the information received and assess the implications for monetary policy. The committee anticipates that some additional policies may be appropriate to achieve a monetary policy stance that is sufficiently restrictive to bring inflation back 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 delays with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the committee will continue to reduce its holdings of Treasury securities, agency debt and agency mortgage-backed securities, as indicated in its previously announced plans. The Committee is firmly committed to returning inflation to its 2 per cent target.
In assessing the appropriate stance for monetary policy, the committee will continue to monitor the implications of the information received on the economic outlook. The Committee will be ready to adjust the position of monetary policy appropriately if risks arise that may impede the achievement of the Committee’s objectives. 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.
The vote in favor of monetary policy action was Jerome H. Powell, Chairman of; John C. Williams, Vice President; Michael S. Michelle W. Bowman, Lisa D. austin d. Patrick Harker Philip N. Jefferson Neil Kashkari, Laurie K. Logan and Christopher J. Waller.