June 14, 2023
Statement·Presser·Minutes·Policy
Jerome H. Powell
June 14, 2023 FOMC Press Conference
- The chair said the FOMC has raised the policy interest rate by 5 percentage points since early last year.
- The chair said the median SEP projection for real GDP growth is 1.0 percent this year and 1.1 percent next year.
- The chair said the median SEP projection for the federal funds rate is 5.6 percent at the end of 2023, 4.6 percent at the end of 2024, and 3.4 percent at the end of 2025.
- The chair said the median SEP projection for total PCE inflation is 3.2 percent this year, 2.5 percent next year, and 2.1 percent in 2025, with core PCE inflation revised up to 3.9 percent this year.
- The chair said the decision to hold rates steady was only about this meeting, and that the July meeting will be "live" with no decision made yet.
From the opening statement
Press conference
CHAIR POWELL. Good afternoon. My colleagues and I remain squarely focused on our dual mandate to promote maximum employment and stable prices for the American people. We understand the hardship that high inflation is causing, and we remain strongly committed to bringing inflation back down to our 2 percent goal. Price stability is the responsibility of the Federal Reserve. Without price stability, the economy doesn’t work for anyone. In particular, without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all.
Since early last year, the FOMC has significantly tightened the stance of monetary policy. We have raised our policy interest rate by 5 percentage points, and we’ve continued to reduce our securities holdings at a brisk pace. We’ve covered a lot of ground, and the full effects of our tightening have yet to be felt. In light of how far we’ve come in tightening policy, the uncertain lags with which monetary policy affects the economy, and potential headwinds from credit tightening, today we decided to leave our policy interest rate unchanged and to continue to reduce our securities holdings. Looking ahead, nearly all Committee participants view it as likely that some further rate increases will be appropriate this year to bring inflation down to 2 percent over time. And I will have more to say about monetary policy after briefly reviewing economic developments.
The U.S. economy slowed significantly last year, and recent indicators suggest that economic activity has continued to expand at a modest pace. Although growth in consumer spending has picked up this year, activity in the housing sector remains weak, largely reflecting higher mortgage rates. Higher interest rates and slower output growth also appear to be weighing on business fixed investment. Committee participants generally expect subdued growth to continue. In our Summary of Economic Projections, the median projection has real GDP growth at 1.0 percent this year and 1.1 percent next year, well below the median estimate of the longer-run normal growth rate.