December 13–14 · Published January 4, 2017
JYJanet L. YellenDecember 13–14, 2016 FOMC Minutes
Our reading
The minutes read somewhat more hawkish relative to the statement because they reveal a broader and more detailed discussion among participants about the **increased risk of a significant undershooting of the longer-run normal unemployment rate** and the potential need to **raise the federal funds rate more quickly than currently anticipated** to stem inflationary pressures—a nuance that is more subdued and balanced in the official statement, which emphasizes only "gradual increases" and "roughly balanced" risks.
Our reading compares the minutes of the December 13–14 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
- Loretta J. Mester
- Jerome H. Powell
- Eric S. Rosengren
- Daniel K. Tarullo
- Janet L. Yellen
From the minutes
FOMC minutes
Voting for this action: Janet L. Yellen, William C. Dudley, Lael Brainard, James Bullard, Stanley Fischer, Esther L. George, Loretta J. Mester, Jerome H. Powell, Eric Rosengren, and Daniel K. Tarullo.
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 1/4 percentage point, to 3/4 percent, effective December 15, 2016. The Board of Governors also voted unanimously to approve a 1/4 percentage point increase in the primary credit rate (discount rate) to 1-1/4 percent, effective December 15, 2016.7
It was agreed that the next meeting of the Committee would be held on Tuesday-Wednesday, January 31-February 1, 2017. The meeting adjourned at 10:05 a.m. on December 14, 2016.
What changed from the previous meeting’s minutes
- The FOMC raised the target range for the federal funds rate by 25 basis points to 1/2 to 3/4 percent.
- The vote was unanimous, with no dissents, after two members dissented in November.
- The Board of Governors raised the interest rates on required and excess reserve balances to 3/4 percent.
- The primary credit rate (discount rate) was increased by 25 basis points to 1-1/4 percent.
- Participants judged labor market conditions at or close to maximum employment, a shift from prior slack concerns.
Summary generated automatically from the two documents.