December 15–16 · Published January 6, 2016
JYJanet L. YellenDecember 15–16, 2015 FOMC Minutes
Our reading
The minutes are consistent with the statement because both documents describe the same economic conditions—moderate growth, solid household and business spending, improved housing, soft net exports, strengthening labor market with diminished underutilization, and inflation below 2% due to energy and import price declines—and both justify the decision to raise the federal funds rate to 1/4 to 1/2 percent based on considerable labor market improvement and reasonable confidence in inflation returning to 2% over the medium term, while also emphasizing that policy will remain accommodative and future increases will be gradual and data-dependent.
Our reading compares the minutes of the December 15–16 FOMC meeting with the FOMC statement issued at the end of that meeting, three weeks before the minutes were published.
Vote
- Lael Brainard
- William C. Dudley
- Charles L. Evans
- Stanley Fischer
- Jeffrey M. Lacker
- Dennis P. Lockhart
- Jerome H. Powell
- Daniel K. Tarullo
- John C. Williams
- Janet L. Yellen
From the minutes
FOMC minutes
Voting against this action: None.
To support the Committee's decision to raise the target range for the federal funds rate, the Board of Governors voted unanimously to raise the interest rates on required and excess reserve balances by 1/4 percentage point, to 1/2 percent, effective December 17, 2015. The Board of Governors also voted unanimously to approve a 1/4 percentage point increase in the primary credit rate (discount rate) to 1 percent, effective December 17, 2015.4
After these policy decisions, the deputy manager of the System Open Market Account briefed the Committee on plans for term RRPs over year-end.
It was agreed that the next meeting of the Committee would be held on Tuesday-Wednesday, January 26-27, 2016. The meeting adjourned at 10:30 a.m. on December 16, 2015.
What changed from the previous meeting’s minutes
- The FOMC raised the federal funds rate target range to 1/4 to 1/2 percent from 0 to 1/4 percent.
- The vote was unanimous, with no dissents, whereas one member dissented in October.
- The postmeeting statement removed language about assessing progress before raising the rate, instead announcing the increase.
- The FOMC anticipated retaining the reinvestment policy until normalization was well under way, a new condition.
- The Board of Governors raised the interest rate on reserve balances and the primary credit rate by 25 basis points.
Summary generated automatically from the two documents.