December 17–18 · Published January 8, 2025
Jerome H. Powell
December 17–18, 2024 FOMC Minutes
Our reading
The minutes are consistent with the statement because they reflect the same key points: the FOMC observed solid economic expansion, easing labor market conditions with a low but rising unemployment rate, and inflation that has progressed toward 2% but remains elevated, leading to the decision to lower the federal funds rate by 25 basis points while acknowledging roughly balanced risks and an uncertain outlook.
Our reading compares the minutes of the December 17–18 FOMC meeting with the FOMC statement issued at the end of that meeting, three weeks before the minutes were published.
Vote
- Thomas I. Barkin
- Michael S. Barr
- Raphael W. Bostic
- Michelle W. Bowman
- Lisa D. Cook
- Mary C. Daly
- Beth M. Hammack ↑ dissented
- She preferred to maintain the target range for the federal funds rate at 4-1/2 to 4-3/4 percent, in light of uneven progress in returning inflation to 2 percent, the strength of the economy and the labor market, and the state of financial conditions. In her view, with the current federal funds rate not far from neutral, holding the funds rate at a modestly restrictive stance for a time was appropriate to ensure that inflation returns to 2 percent in a timely fashion.
- Philip N. Jefferson
- Adriana D. Kugler
- Jerome H. Powell
- Christopher J. Waller
- John C. Williams
From the minutes
FOMC minutes
Voting against this action: Beth M. Hammack.
President Hammack dissented because she preferred to maintain the target range for the federal funds rate at 4-1/2 to 4-3/4 percent, in light of uneven progress in returning inflation to 2 percent, the strength of the economy and the labor market, and the state of financial conditions. In her view, with the current federal funds rate not far from neutral, holding the funds rate at a modestly restrictive stance for a time was appropriate to ensure that inflation returns to 2 percent in a timely fashion.
Consistent with the Committee's decision to lower the target range for the federal funds rate to 4-1/4 to 4-1/2 percent, the Board of Governors of the Federal Reserve System voted unanimously to lower the interest rate paid on reserve balances to 4.4 percent, effective December 19, 2024. The Board of Governors of the Federal Reserve System voted unanimously to approve a 1/4 percentage point decrease in the primary credit rate to 4.5 percent, effective December 19, 2024.2
It was agreed that the next meeting of the Committee would be held on Tuesday–Wednesday, January 28–29, 2025. The meeting adjourned at 10:10 a.m. on December 18, 2024.
What changed from the previous meeting’s minutes
- The target range for the federal funds rate was lowered to 4-1/4 to 4-1/2 percent from 4-1/2 to 4-3/4 percent.
- Beth M. Hammack voted against the decision, preferring to maintain the previous target range.
- The ON RRP facility rate was set equal to the bottom of the target range, a technical adjustment.
- Almost all participants judged upside risks to inflation had increased, versus little changed previously.
- A majority of participants noted their policy decision was finely balanced, with some favoring no change.
- The FOMC indicated it would likely slow the pace of further policy adjustments.
Summary generated automatically from the two documents.