Title: Highlights from the December 2023 FOMC Press Conference
Summary:
1. Dual Mandate Focus: The Federal Open Market Committee (FOMC) remains committed to promoting maximum employment and stable prices. Inflation has decreased from its peak, but it’s still higher than desired.
2. Inflation and Unemployment: While inflation remains a concern, there has been progress without a significant rise in unemployment. The FOMC emphasizes the uncertainty of the path ahead.
3. Commitment to Price Stability: The FOMC is dedicated to returning inflation to the 2% goal. Policy interest rates were raised by 5.25 percentage points, and the reduction of security holdings continues.
4. Economic Activity and Outlook: Economic growth has slowed but remains positive, with GDP expected to grow around 2.5% for the year. Consumer demand remains strong, but higher mortgage and interest rates are impacting housing and business investments.
5. Labor Market Conditions: The job market is still tight, but there are signs of balance with an average job gain of 204,000 per month. The unemployment rate is low at 3.7%, and labor force participation has improved.
6. Inflation Projections: Inflation is expected to be 2.8% this year, falling to 2.4% next year, and reaching 2% in 2026. The FOMC will closely monitor inflation expectations.
7. Policy Adjustments: Decisions on further policy tightening will be data-driven. The FOMC is cautious, considering the cumulative impact of past policy changes.
8. Future Rate Projections: Future adjustments in the federal funds rate will depend on economic developments. The projected rates are 4.6% by the end of 2024, 3.6% by 2025, and 2.9% by 2026.
9. Ongoing Economic Evaluation: The FOMC will continue to evaluate incoming data and adjust policies as needed to achieve employment and price stability goals.
10. Public Impact Awareness: The FOMC acknowledges the hardship caused by high inflation and is committed to restoring price stability for the benefit of the public.
Conclusion: The FOMC’s decisions in the coming months will be pivotal in shaping the economic landscape, with a careful balance between controlling inflation and supporting economic growth.
Full Transcript: https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20231213.pdf
