March 15–16 · Published April 6, 2016
JYJanet L. YellenMarch 15–16, 2016 FOMC Minutes
Our reading
The minutes read consistent with the statement because both documents reflect the same key decisions and assessments: the FOMC voted to maintain the federal funds rate target range at 1/4 to 1/2 percent, acknowledged moderate economic expansion despite global risks, noted labor market strengthening and low inflation that is expected to rise to 2 percent over the medium term, and agreed to continue reinvesting principal payments and rolling over maturing Treasury securities to maintain accommodative financial conditions.
Our reading compares the minutes of the March 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
- James B. Bullard
- William C. Dudley
- Stanley Fischer
- Esther L. George ↑ dissented
- She believed that a 25 basis point increase in the target range for the federal funds rate was warranted at this meeting. Although risks to the global economy had increased in recent months and financial markets were unusually volatile at times, she believed that monetary policy should focus primarily on progress toward the Committee's longer-run objectives.
- Loretta J. Mester
- Jerome H. Powell
- Eric S. Rosengren
- Daniel K. Tarullo
- Janet L. Yellen
From the minutes
FOMC minutes
Ms. George dissented because she believed that a 25 basis point increase in the target range for the federal funds rate was warranted at this meeting. Although risks to the global economy had increased in recent months and financial markets were unusually volatile at times, she believed that monetary policy should focus primarily on progress toward the Committee's longer-run objectives.
Recently, labor market conditions had continued to strengthen, with the economy apparently near full employment, and some data had suggested a firming of underlying inflation trends. She believed that monetary policy should respond to these developments by gradually removing accommodation. She noted that, in such circumstances, postponing the removal of accommodation could increase financial distortions and risks to the economy and undermine the achievement of the Committee's longer-run objectives.
Consistent with the Committee's decision to leave the target range for the federal funds rate unchanged, the Board of Governors took no action to change the interest rates on reserves or discount rates.
It was agreed that the next meeting of the Committee would be held on Tuesday-Wednesday, April 26-27, 2016. The meeting adjourned at 10:40 a.m. on March 16, 2016.
What changed from the previous meeting’s minutes
- One member, Esther L. George, dissented in March, preferring a 25 basis point rate increase; January had no dissents.
- March minutes noted inflation had picked up recently, while January described inflation as continuing to run below target.
- March cited a couple of participants favoring a rate hike to 1/2 to 3/4 percent; January had no such explicit preference.
- March reported some survey-based inflation expectation measures edged down or up; January said they were little changed.
- March stated global developments posed downside risks, with many seeing a lower federal funds rate path; January saw uncertainty but no clear risk shift.
- March noted asset price movements from earlier in the year had reversed largely; January highlighted tighter financial conditions from equity declines and credit spread widening.
Summary generated automatically from the two documents.