June 18–19 · Published July 10, 2019
Statement·Presser·Minutes·Policy
Jerome H. Powell
June 18–19, 2019 FOMC Minutes
Our reading
The minutes read as more dovish than the statement because they provide a detailed, deliberative account of the internal debate, revealing that a significant majority of participants had revised down their expected path for the federal funds rate and saw a stronger case for near-term accommodation. In contrast, the statement is a consensus document that, while acknowledging increased uncertainties, maintains a neutral policy stance by keeping rates unchanged and using balanced language about acting "as appropriate." The minutes expose the depth of concern over downside risks, soft inflation, and the possibility of future cuts, which is not fully conveyed in the statement's more cautious, forward-looking but non-committal phrasing.
Our reading compares the minutes of the June 18–19 FOMC meeting with the FOMC statement issued at the end of that meeting, three weeks before the minutes were published.
Vote
- Michelle W. Bowman
- Lael Brainard
- James B. Bullard ↓ dissented
- Mr. Bullard dissented because he believed that the current stance of monetary policy could be better positioned to foster progress toward the Committee's statutory objectives of maximum employment and stable prices. Particularly in light of persistent low readings on inflation and from indicators of inflation expectations along with the risks to the U.S. outlook associated with global economic developments, he noted that a policy rate reduction at the current meeting would help re-center inflation and inflation expectations at levels consistent with the Committee's symmetric 2 percent inflation objective and simultaneously provide some insurance against unexpected developments that could slow U.S. economic growth.
- Richard H. Clarida
- Charles L. Evans
- Esther L. George
- Jerome H. Powell
- Randal K. Quarles
- Eric S. Rosengren
- John C. Williams
From the minutes
FOMC minutes
Voting for this action: Jerome H. Powell, John C. Williams, Michelle W. Bowman, Lael Brainard, Richard H. Clarida, Charles L. Evans, Esther L. George, Randal K. Quarles, and Eric Rosengren.
Voting against this action: James Bullard.
Mr. Bullard dissented because he believed that the current stance of monetary policy could be better positioned to foster progress toward the Committee's statutory objectives of maximum employment and stable prices. Particularly in light of persistent low readings on inflation and from indicators of inflation expectations along with the risks to the U.S. outlook associated with global economic developments, he noted that a policy rate reduction at the current meeting would help re-center inflation and inflation expectations at levels consistent with the Committee's symmetric 2 percent inflation objective and simultaneously provide some insurance against unexpected developments that could slow U.S. economic growth.
Consistent with the Committee's decision to leave the target range for the federal funds rate unchanged, the Board of Governors voted unanimously to leave the interest rates on required and excess reserve balances unchanged at 2.35 percent and voted unanimously to approve establishment of the primary credit rate at the existing level of 3.00 percent, effective June 20, 2019.
What changed from the previous meeting’s minutes
- Participants revised down SEP projections for inflation and the longer-run normal unemployment rate.
- One member, James Bullard, dissented in favor of a 25 basis point rate cut.
- The FOMC removed "patient" language from the postmeeting statement.
- The statement added that uncertainties about the economic outlook had increased.
- Market-based inflation compensation was described as having declined, not remained low.
- Downside risks to the economic outlook were judged to have risen materially since May.
Summary generated automatically from the two documents.