Highlights
- The FOMC voted not to change interest rates at this meeting.
- There was very little change in the statement, which again described the economic recovery as having “picked up from the modest pace seen in the first half of this year.” Though household spending was revised from “growing strongly” to “rising moderately”
- The committee continues to believe that “near-term risks to the economic outlook appear roughly balanced.”
- It continues to reinvest maturing principal payments to maintain the size of its balance sheet.
- There were only two dissenting voters, rather than the three at the last meeting—“Esther L. George and Loretta J. Mester, each of whom preferred at this meeting to raise the target range for the federal funds rate to 1/2 to 3/4 percent.”
As expected there was no change in interest rates at this meeting. Also as expected, it left the door wide open for an increase at its December 14 meeting. It signalled this using the same language as in the previous statement: “The Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives.”
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Richard de Chazal, CFA is a London-based macroeconomist covering the U.S. economy and financial markets.