November 07, 2024
September 18, 2024
Jerome H. Powell
November 7, 2024 FOMC Statement
FOMC statement
Federal Reserve issues FOMC statement
For release at 2:00 p.m. EDT EST
Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains Since earlier in the year, labor market conditions have slowed, generally eased, and the unemployment rate has moved up but remains low. Inflation has made further progress toward the Committee's 2 percent objective but remains somewhat elevated.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
In light support of its goals, the progress on inflation and the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/2 1/4 percentage point to 4-3/4 4-1/2 to 5 4-3/4 percent. In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Michael S. Barr; Raphael W. Bostic; Michelle W. Bowman; Lisa D. Cook; Mary C. Daly; Beth M. Hammack; Philip N. Jefferson; Adriana D. Kugler; and Christopher J. Waller. Voting against this action was Michelle W. Bowman, who preferred to lower the target range for the federal funds rate by 1/4 percentage point at this meeting.
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Implementation Note issued September 18, November 7, 2024
Our summary
What changed
- The FOMC lowered the federal funds rate by 1/4 percentage point to 4-1/2 to 4-3/4 percent, a smaller cut than the previous 1/2 point reduction.
- Language on labor markets shifted from 'job gains have slowed' to 'labor market conditions have generally eased' since earlier in the year.
- The statement removed the sentence about inflation making 'further progress,' now saying it has 'made progress' toward the 2 percent objective.
- The FOMC dropped the phrase about gaining 'greater confidence' that inflation is moving sustainably toward 2 percent.
- The vote was unanimous; the previous dissent from Michelle W. Bowman, who preferred a smaller cut, is no longer present.
Implications
The smaller rate cut and removal of 'greater confidence' language suggest the FOMC sees less urgency to ease policy, possibly reflecting a more balanced view on inflation progress.
The unanimous vote indicates internal agreement on the current path, which may signal a steadier approach to future adjustments.
The shift to describing labor market easing as 'generally' could imply a softer but not deteriorating jobs picture, supporting a gradual policy stance.
Summary generated automatically from the statements. Not investment advice.
Implementation Note
The settings that put the decision into effect: the interest rate paid on reserves, the FOMC's instructions to the New York Fed's trading desk, and the discount rate. Changes are marked the same way as in the statement.
- The Board of Governors of the Federal Reserve System voted unanimously to lower the interest rate paid on reserve balances to
4.94.65 percent, effectiveSeptember 19,November 8, 2024. - As part of its policy decision, the Federal Open Market Committee voted to direct the Open Market Desk at the Federal Reserve Bank of New York, until instructed otherwise, to execute transactions in the System Open Market Account in accordance with the following domestic policy directive: "Effective
September 19,November 8, 2024, the Federal Open Market Committee directs the Desk to: - Undertake open market operations as necessary to maintain the federal funds rate in a target range of
4‑3/44-1/2 to54‑3/4 percent. - Conduct standing overnight repurchase agreement operations with a minimum bid rate of
54.75 percent and with an aggregate operation limit of $500 billion. - Conduct standing overnight reverse repurchase agreement operations at an offering rate of
4.84.55 percent and with a per-counterparty limit of $160 billion per day. - Roll over at auction the amount of principal payments from the Federal Reserve's holdings of Treasury securities maturing in each calendar month that exceeds a cap of $25 billion per month. Redeem Treasury coupon securities up to this monthly cap and Treasury bills to the extent that coupon principal payments are less than the monthly cap.
- Reinvest the amount of principal payments from the Federal Reserve's holdings of agency debt and agency mortgage‑backed securities (MBS) received in each calendar month that exceeds a cap of $35 billion per month into Treasury securities to roughly match the maturity composition of Treasury securities outstanding.
- Allow modest deviations from stated amounts for reinvestments, if needed for operational reasons.
- Engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve's agency MBS transactions."
- In a related action, the Board of Governors of the Federal Reserve System voted unanimously to approve a
1/21/4 percentage point decrease in the primary credit rate to54.75 percent, effectiveSeptember 19,November 8, 2024. In taking this action, the Board approved requests to establish that rate submitted by theBoardBoards of Directors of the Federal ReserveBankBanks ofAtlanta.Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, Minneapolis, Dallas, and San Francisco.
Press conference
November 7, 2024, 2:30 p.m. ET · Read the transcript
What Powell said that the statement didn't
- The chair said the economy is strong overall and has made significant progress toward the Fed's goals over the past two years.
- The chair said inflation has eased substantially from a peak of 7 percent to 2.1 percent as of September.
- The chair said payroll job gains averaged 104,000 per month over the past three months, and the figure would have been somewhat higher without the effects of labor strikes and hurricanes in October.
- The chair said the unemployment rate edged down over the past three months to 4.1 percent in October, notably higher than a year ago but still low.
- The chair said the recent rise in long-term bond yields appears not principally about higher inflation expectations but about a sense of stronger growth and less downside risk, and that it's too early to say where they settle.
Summary generated automatically from the transcript and the statement.