June 12–13 · Published July 5, 2018
Statement·Presser·Minutes·Policy
Jerome H. Powell
June 12–13, 2018 FOMC Minutes
Our reading
The minutes read consistent with the statement because they detail the same economic assessments—such as a strengthening labor market, solid economic activity, and inflation near 2 percent—and confirm the FOMC's decision to raise the federal funds rate to 1-3/4 to 2 percent, while also elaborating on the discussions and rationale behind those views.
Our reading compares the minutes of the June 12–13 FOMC meeting with the FOMC statement issued at the end of that meeting, three weeks before the minutes were published.
Vote
- Thomas I. Barkin
- Raphael W. Bostic
- Lael Brainard
- William C. Dudley
- Loretta J. Mester
- Jerome H. Powell
- Randal K. Quarles
- John C. Williams
From the minutes
FOMC minutes
In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments."
Voting for this action: Jerome H. Powell, William C. Dudley, Thomas I. Barkin, Raphael W. Bostic, Lael Brainard, Loretta J. Mester, Randal K. Quarles, and John C. Williams.
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 to 1.95 percent, effective June 14, 2018. The Board of Governors also voted unanimously to approve a 1/4 percentage point increase in the primary credit rate (discount rate) to 2-1/2 percent, effective June 14, 2018.4
What changed from the previous meeting’s minutes
- The FOMC raised the target range for the federal funds rate to 1-3/4 to 2 percent from 1-1/2 to 1-3/4 percent.
- The forward-guidance language stating the federal funds rate would remain below longer-run levels was removed from the postmeeting statement.
- The IOER rate was set 5 basis points below the top of the target range, at 1.95 percent.
- The monthly cap on Treasury principal rollovers was increased from $18 billion to $24 billion, effective in July.
- The monthly cap on agency mortgage-backed securities reinvestments was increased from $12 billion to $16 billion, effective in July.
- The unemployment rate fell to 3.8 percent in May, below the estimate of each participant who submitted a longer-run projection.
Summary generated automatically from the two documents.