December 18–19 · Published January 9, 2019
Jerome H. Powell
December 18–19, 2018 FOMC Minutes
Our reading
The minutes read more dovish relative to the statement because they reveal that, despite the unanimous decision to raise rates, many participants expressed increased caution and a willingness to be "patient" about future hikes, citing heightened financial market volatility, concerns about global growth, and muted inflation pressures—nuances that the statement’s language (e.g., "some further gradual increases" and "risks are roughly balanced") did not fully convey.
Our reading compares the minutes of the December 18–19 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
- Michelle W. Bowman
- Lael Brainard
- Richard H. Clarida
- Mary C. Daly
- Loretta J. Mester
- Jerome H. Powell
- Randal K. Quarles
- John C. Williams
From the minutes
FOMC minutes
Voting for this action: Jerome H. Powell, John C. Williams, Thomas I. Barkin, Raphael W. Bostic, Michelle W. Bowman, Lael Brainard, Richard H. Clarida, Mary C. Daly, Loretta J. Mester, and Randal K. Quarles.
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 2.40 percent, effective December 20, 2018. The Board of Governors also voted unanimously to approve a 1/4 percentage point increase in the primary credit rate (discount rate) to 3.00 percent, effective December 20, 2018.6
It was agreed that the next meeting of the Committee would be held on Tuesday-Wednesday, January 29-30, 2019. The meeting adjourned at 10:50 a.m. on December 19, 2018.
What changed from the previous meeting’s minutes
- The FOMC raised the federal funds rate target range to 2-1/4 to 2-1/2 percent from 2 to 2-1/4 percent.
- A few participants favored no change in the target range at this meeting, unlike the unanimous support for holding in November.
- The postmeeting statement changed "expects that further gradual increases" to "judges that some further gradual increases."
- The statement added that the FOMC would "continue to monitor global economic and financial developments."
- The IOER rate was adjusted to 10 basis points below the top of the target range, and the primary credit rate was raised to 3.00 percent.
- Participants noted core inflation had edged lower in recent months, and longer-term TIPS-based inflation compensation had declined notably.
Summary generated automatically from the two documents.