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September 18, 2024US MONETARY POLICY At its scheduled Federal Open Market Committee (FOMC) meeting on September 18, the Federal Reserve announced that it reduce the target range for the federal funds rate by 0.5 percentage points to 4.75% to 5.0%. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve's Balance Sheet that were issued in May 2022.
Recent economic indicators show that US economy has continued to expand at a solid pace. US real GDP growth was estimated at 3.0% in the second quarter of 2024. Job gains have slowed and unemployment has moved up but remains low. Inflation has eased and continues to move toward the committee's target of 2%. The United States Consumer Price Index (not seasonally adjusted) for All Urban Consumers increased 2.5% year-over-year in August 2024.
FOMC has also released their September economic projections. Real GDP is expected to grow at 2.0% annually from 2024 to 2027. Unemployment rate is forecasted to remain stable in 2024 and 2025 at 4.4% and decline to 4.3% in 2026 and to 4.2% in 2027. PCE inflation is projected to decline to 2.3% in 2024, 2.1% in 2025 and 2.0% in 2026 and 2027.
The Committee will continue to monitor economic developments and is prepared to adjust the monetary policy measures as appropriate, considering information on labor market conditions, inflation pressures and inflation expectations, and financial and international developments. The next scheduled FOMC meeting will be held on November 6-7, 2024.
Source: US Federal Reserve, FOMC Press Release; Economic Projections
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