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FOMC Meeting Announcement  
Released On 11/8/2018 2:00:00 PM
PriorConsensusConsensus RangeActual
Federal Funds Rate - Target Level2.00 to 2.25 %2.125 %2.00 % to 2.25 %2.00 to 2.25 %

Highlights
The FOMC took a pass as expected at their November policy meeting, keeping the federal funds target unchanged within a range of 2.00 to 2.25 percent with an implied 2.125 percent mid-point. Their assessment of economic activity and job gains are also unchanged from their last statement in September, both described as strong.

But there are a couple of changes in today's announcement. On the strong side, the unemployment gets an upgrade from "low" to having "declined" further reflecting October's 2 tenths downtick in the unemployment rate to 3.7 percent. But on the soft side, business investment where growth in the last statement was described as strong is now described as having "moderated", this consistent with the flat showing for nonresidential fixed investment in the third-quarter GDP report. Not changed is the assessment of growth in household spending which remains strong.

There are no other changes in the text where the key line is repeated -- that further gradual increases in the funds target can be expected. Also not changed is the unanimity of the committee, at 9 to 0 and, as consistent all year, showing no dissent.

In their September meeting, FOMC forecasts showed one more rate hike penciled in for this year where expectations will focus on the December meeting, in what would extend a rate-hike sequence that Fed policy makers see as necessary to limit the risk of overheating in the economy and the risk of unwanted inflation.

Consensus Outlook
Despite strong economic growth and the rise in average hourly earnings, there are no expectations for a rate hike at the November FOMC. There are expectations, however, for action at the December 18 & 19 meeting which, unlike this month's meeting, will be accompanied by updated FOMC forecasts and a press conference. In an announcement slated for today Thursday and not the usual Wednesday, the FOMC is expected to hold its federal funds target range at a range between 2.00 and 2.25 percent with an implied target of 2.125 percent.

Definition
The FOMC meeting announcement is a policy statement issued at the conclusion of each meeting of the Federal Open Market Committee. It offers updates on economic conditions with special focus on the health of the labor market and the latest on inflation. It also updates the status of the federal funds target which is the FOMC's official policy interest rate. This rate is expressed within a range, such as 1.75 to 2.00 percent. The center of this range is the implied target. The higher this target, the more restrictive monetary policy becomes, the lower this target, the more accommodative policy becomes. Other policy tools are also discussed in the meeting announcement including updates on direct purchases of Treasuries and mortgage-backed securities. Debate is not offered in the statement, just the consensus view is expressed, though the statement does list the total committee vote and how each member voted.  Why Investors Care
 
[Chart]
The Fed closely monitors the core PCE price index to indicate whether or not policy is approximately correct, overly accommodative, or too restrictive. The PCE price index is preferred to the CPI because it is more closely aligned to the cost of living than the CPI [which measures a fixed basket of goods & services.] This chart covers monthly data and the fed funds target rate reflects the monthly average. As such, it will not correspond to the most recent fed funds rate target
Data Source: Haver Analytics
 

2018 Release Schedule
Released On: 1/313/215/26/138/19/2611/812/19
 


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