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Fed holds rates steady in July

by Reg Clodfelter

At its July 27 meeting, the Federal Open Markets Committee decided against raising the target range of the federal funds rate, noting monetary policy will remain accommodative in order to support improvement in the labor market and a return to 2 percent inflation.

In a statement following the meeting, the committee indicated it did not expect these factors to change before its September meeting, stating inflation should remain low in the near term “in part because of earlier declines in energy prices,” but it is expected to rise to 2 percent in the medium term “as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further.”

The committee did appear warm on the economy, pointing to strong job growth in June and adding that near-term economic risks have diminished.

Predictably light on hard facts, the committee did state it expects economic conditions to warrant only gra

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