Keep It Steady

As widely expected, the FOMC maintained its federal-funds rate at the current range of 4.25 - 4.50%. Today’s decision marks the first pause since a “recalibration” of policy began in September on fears of a deteriorating labor market. 

Some language in the policy statement had changed since the last FOMC. Notably, “inflation has made progress toward the committee’s 2 percent objective” was removed from the statement. When asked about the significance of the change during the post-meeting press conference, Federal Reserve Chair Jerome Powell clarified that this was simply a case of “language cleanup”. Retiring a phrase is not uncommon, and the language in the statement can change over time. The Fed chair added that inflation data since the last FOMC meeting had been moving in the right direction.

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