July 26–27 · Published August 17, 2016
Statement·Presser·Minutes
JYJanet L. YellenJuly 26–27, 2016 FOMC Minutes
Our reading
The minutes are consistent with the statement because they provide a detailed account of the FOMC's discussion and rationale that directly supports the statement's key points, such as the assessment of labor market strengthening, moderate economic expansion, below-target inflation, diminished near-term risks, and the decision to maintain the federal funds rate target range.
Our reading compares the minutes of the July 26–27 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
- Ms. George dissented because she believed that a 25 basis point increase in the target range for the federal funds rate was appropriate at this meeting. Information available since the June FOMC meeting showed solid employment growth, economic growth near its trend, and inflation outcomes aligning with the Committee's objective. Domestic financial conditions had eased since the U.K. referendum. She believed that monetary policy should respond to these developments by gradually removing accommodation, consistent with the prescriptions of several frameworks for assessing the appropriate stance of monetary policy. She believed that by waiting longer to adjust the policy stance and deviating from the appropriate path to policy normalization, the Committee risked eroding the credibility of its policy communications.
- 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 appropriate at this meeting. Information available since the June FOMC meeting showed solid employment growth, economic growth near its trend, and inflation outcomes aligning with the Committee's objective. Domestic financial conditions had eased since the U.K. referendum. She believed that monetary policy should respond to these developments by gradually removing accommodation, consistent with the prescriptions of several frameworks for assessing the appropriate stance of monetary policy. She believed that by waiting longer to adjust the policy stance and deviating from the appropriate path to policy normalization, the Committee risked eroding the credibility of its policy communications.
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.
Secretary's note: The following statement regarding the June 14-15, 2016, FOMC meeting was inadvertently omitted from minutes of that meeting: "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, September 20-21, 2016. The meeting adjourned at 10:30 a.m. on July 27, 2016.
What changed from the previous meeting’s minutes
- The July minutes report the U.K. referendum's "leave" vote outcome, whereas June minutes anticipated it as an upcoming risk.
- July minutes note one member, Esther L. George, dissented in favor of a 25 basis point rate increase; June minutes recorded no dissents.
- July minutes state near-term risks to the economic outlook had diminished; June minutes did not include such a statement.
- July minutes describe labor market conditions as strengthened with strong June job gains following weak May growth; June minutes described slowed labor market improvement.
- July minutes add a Secretary's note correcting an omitted June statement on reserve and discount rates.
Summary generated automatically from the two documents.