Today, March 20th, 2019, the Federal Open Market Committee (FOMC) voted to maintain the target range for the federal funds rate of 2.25 to 2.50 per cent.  The Committee noted that they expect the economic expansion to be sustained with a strong labour market and inflation near the 2 per cent objective. However, in light of global economic and financial developments and muted inflation pressures, the committee "will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes".

The Committee noted the labour market remains strong but growth in economic activity has slowed since Q4 2018. Slower growth in household spending and business fixed investment in Q1 2019 is expected. Overall inflation has declined, due to lower energy prices, but inflation excluding food and energy remains near 2 per cent. Market-based measures of inflation compensation have remained low in recent months, while longer-term inflation expectations are little changed.

The median projection from the US Federal Reserve for real GDP growth for the US economy is lower than previous December projections. The US economy is projected to grow 2.1 per cent (previously 2.3%) in 2019, 1.9 per cent in 2020 (previously 2.0%), and 1.8 per cent (unchanged) in 2021. The projections for inflation are 1.8 per cent in 2019, and 2.0 per cent in 2020 and 2021. The Federal funds rate projections are lower by 0.5 percentage points in every year than the December projections at 2.4 per cent in 2019, 2.6 per cent in 2020 and 2.6 per cent.

US Federal Reserve