BOC Summary of Governing Council Deliberations

Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have slowed, and the unemployment rate has moved up but remains low. Inflation has made further progress toward the Committee’s 2 percent objective but remains somewhat elevated. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate. In light of the progress on inflation and the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/2 percentage point to 4-3/4 to 5 percent. In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt an post: FOMC STATEMENT COMPARE pic.twitter.com/e4OUTq9nRB post: VOTE IN FAVOR OF POLICY WAS 11-1, WITH FED GOVERNOR BOWMAN DISSENTING; BOWMAN PREFERRED A 25-BASIS-POINT REDUCTION post: FED: THE FOMC HAS GAINED GREATER CONFIDENCE IN INFLATION MOVING SUSTAINABLY TOWARD 2%, JUDGES RISKS TO EMPLOYMENT, AND INFLATION GOALS ARE ROUGHLY IN BALANCE. post: FED: WE WILL CAREFULLY ASSESS INCOMING DATA, EVOLVING OUTLOOK, AND BALANCE OF RISKS IN CONSIDERING ADDITIONAL RATE ADJUSTMENTS.

In conjunction with the Federal Open Market Committee (FOMC) meeting held on September 17–18, 2024, meeting participants submitted their projections of the most likely outcomes for real gross domestic product (GDP) growth, the unemployment rate, and inflation for each year from 2024 to 2027 and over the longer run. Each participant’s projections were based on information available at the time of the meeting, together with her or his assessment of appropriate monetary policy—including a path for the federal funds rate and its longer-run value—and assumptions about other factors likely to affect economic outcomes. The longer-run projections represent each participant’s assessment of the value to which each variable would be expected to converge, over time, under appropriate monetary policy and in the absence of further shocks to the economy. “Appropriate monetary policy” is defined as the future path of policy that each participant deems most likely to foster outcomes for economic activity and inflation that best satisfy his or her individual interpretation of the statutory mandate to promote maximum employment and price stability. post: *FED’S MEDIAN RATE FORECAST END-’24 AT 4.4%; PREV. 5.1% *FED’S MEDIAN RATE FORECAST END-’25 AT 3.4%; PREV. 4.1% *FED’S MEDIAN RATE FORECAST END-’26 AT 2.9%; PREV. 3.1% *FED’S MEDIAN RATE FORECAST END-’27 AT 2.9% *FED’S MEDIAN RATE FORECAST LONGER-RUN AT 2.9%; PREV. 2.8% post: FED PROJECTIONS IMPLY 50 BPS OF ADDITIONAL RATE CUTS IN 2024 FROM CURRENT LEVEL, 100 BPS MORE IN 2025 AND ANOTHER 50 BPS IN 2026 post: FOMC DOT PLOT pic.twitter.com/OFT4mrVis6