January 30, 2019
Statement·Presser·Minutes·Policy
Jerome H. Powell
January 30, 2019 FOMC Press Conference
- The chair said the FOMC decided to maintain the target range for the federal funds rate at 2-1/4 to 2-1/2 percent, but the statement already says this.
- The chair said the policy rate is now in the range of the FOMC's estimates of neutral.
- The chair said the risk of financial imbalances has receded, as indicators of financial risk appetite have moved closer to historical norms.
- The chair said the FOMC decided to continue indefinitely using its current operating procedure for implementing monetary policy, often called a "floor system" or "abundant reserves system."
- The chair said estimates of reserve demand are considerably higher than estimates of a year or so ago, implying balance sheet normalization will be completed sooner and with a larger balance sheet than previously estimated.
From the opening statement
Press conference
CHAIRMAN POWELL. Good afternoon, everyone, and welcome. I will start with a recap of our discussions, including our assessment of the outlook for the economy and the judgments we made about our interest rate policy and our balance sheet. I will cover the decisions we made today as well as our ongoing discussions of matters on which we expect to make decisions in coming meetings.
My colleagues and I have one overarching goal: to sustain the economic expansion, with a strong job market and stable prices, for the benefit of the American people. The U.S. economy is in a good place, and we will continue to use our monetary policy tools to help keep it there. The jobs picture continues to be strong, with the unemployment rate near historic lows and with stronger wage gains. Inflation remains near our 2 percent goal. We continue to expect that the American economy will grow at a solid pace in 2019, although likely slower than the very strong pace of 2018. We believe that our current policy stance is appropriate at this time.
Despite this positive outlook, over the past few months we have seen some crosscurrents and conflicting signals about the outlook. Growth has slowed in some major foreign economies, particularly in China and Europe. There is elevated uncertainty around several unresolved government policy issues, including Brexit, ongoing trade negotiations, and the effects from the partial government shutdown in the United States. Financial conditions tightened considerably late in 2018 and remain less supportive of growth than they were earlier in 2018. And, while most of the incoming domestic economic data have been solid, some surveys of business and consumer sentiment have moved lower, giving reason for caution.