June 13–14 · Published July 5, 2017
Statement·Presser·Minutes·Policy
JYJanet L. YellenJune 13–14, 2017 FOMC Minutes
Our reading
The minutes read consistent with the statement because both documents reflect the same key decisions and economic assessments: the labor market strengthening, moderate economic growth, inflation running below 2 percent, the decision to raise the federal funds rate to 1 to 1-1/4 percent, and the expectation to begin balance sheet normalization this year, with the minutes providing additional detail on the discussion and dissent behind these actions.
Our reading compares the minutes of the June 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
- William C. Dudley
- Charles L. Evans
- Stanley Fischer
- Patrick Harker
- Robert S. Kaplan
- Neel Kashkari ↓ dissented
- Mr. Kashkari dissented because he preferred to maintain the existing target range for the federal funds rate at this meeting. In his view, recent data, while suggesting that the labor market had improved further, had increased doubts about achievement of the Committee's 2 percent longer-run inflation objective and thus had not provided a compelling basis on which to firm monetary policy at this meeting. He preferred to await additional evidence that the recent decline in inflation was temporary and that inflation was moving toward the Committee's symmetric 2 percent inflation objective. He was concerned that raising the federal funds rate target range too soon increased the likelihood that inflation expectations would decline and that inflation would continue to run below 2 percent.
- Jerome H. Powell
- Janet L. Yellen
From the minutes
FOMC minutes
Voting against this action: Neel Kashkari.
Mr. Kashkari dissented because he preferred to maintain the existing target range for the federal funds rate at this meeting. In his view, recent data, while suggesting that the labor market had improved further, had increased doubts about achievement of the Committee's 2 percent longer-run inflation objective and thus had not provided a compelling basis on which to firm monetary policy at this meeting. He preferred to await additional evidence that the recent decline in inflation was temporary and that inflation was moving toward the Committee's symmetric 2 percent inflation objective. He was concerned that raising the federal funds rate target range too soon increased the likelihood that inflation expectations would decline and that inflation would continue to run below 2 percent.
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 1-1/4 percent, effective June 15, 2017. The Board of Governors also voted unanimously to approve a 1/4 percentage point increase in the primary credit rate (discount rate) to 1-3/4 percent, effective June 15, 2017.6
It was agreed that the next meeting of the Committee would be held on Tuesday-Wednesday, July 25-26, 2017. The meeting adjourned at 10:35 a.m. on June 14, 2017.
What changed from the previous meeting’s minutes
- Raised federal funds rate target range from 3/4-1% to 1-1/4%.
- One dissenting vote (Kashkari) versus no dissents previously.
- Announced plan to begin balance sheet normalization program in 2017.
- Shifted from viewing March inflation dip as transitory to monitoring persistent softness.
- Noted financial conditions eased despite policy tightening, with equity prices high.
- Removed language on overcoming transitory slowing before next rate hike.
Summary generated automatically from the two documents.