March 19, 2025
January 29, 2025
Jerome H. Powell
March 19, 2025 FOMC Statement
FOMC statement
Federal Reserve issues FOMC statement
For release at 2:00 p.m. EST EDT
Recent indicators suggest that economic activity has continued to expand at a solid pace. The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid. Inflation remains somewhat elevated.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that Uncertainty around the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the has increased. The Committee is attentive to the risks to both sides of its dual mandate.
In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent. In considering the extent and timing of 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. Beginning in April, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $25 billion to $5 billion. The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion. 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; Michael S. Barr; Michelle W. Bowman; Susan M. Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N. Jefferson; Adriana D. Kugler; Alberto G. Musalem; and Jeffrey R. Schmid; and Schmid. Voting against this action was Christopher J. Waller. Waller, who supported no change for the federal funds target range but preferred to continue the current pace of decline in securities holdings.
For media inquiries, please email [email protected] or call 202-452-2955.
Implementation Note issued January 29, March 19, 2025
Our summary
What changed
- The FOMC maintained the federal funds rate target range at 4-1/4 to 4-1/2 percent, unchanged from January.
- The statement replaced the prior language that risks to goals were roughly in balance with a note that uncertainty around the economic outlook has increased.
- Beginning in April, the FOMC will slow the pace of balance sheet runoff by cutting the monthly Treasury redemption cap from $25 billion to $5 billion, keeping the agency debt and MBS cap at $35 billion.
- The vote was no longer unanimous: Christopher J. Waller dissented, preferring to continue the current pace of decline in securities holdings.
Implications
The shift to highlighting increased uncertainty suggests the FOMC sees greater downside risks to the outlook, possibly signaling a more cautious stance on future rate moves.
The decision to taper balance sheet runoff while holding rates steady indicates a preference for gradual policy adjustment, which markets may interpret as a modest easing of monetary tightening.
Summary generated automatically from the statements. Not investment advice.
Projections
| 2025 | 2026 | 2027 | Longer run | |
|---|---|---|---|---|
| Real GDP growth | 1.7 was 2.1 | 1.8 was 2.0 | 1.8 was 1.9 | 1.8 |
| Unemployment rate | 4.4 was 4.3 | 4.3 | 4.3 | 4.2 |
| PCE inflation | 2.7 was 2.5 | 2.2 was 2.1 | 2.0 | 2.0 |
| Core PCE inflation | 2.8 was 2.5 | 2.2 | 2.0 | |
| Federal funds rate | 3.9 | 3.4 | 3.1 | 3.0 |
Median projections of FOMC participants; previous: December.
Each dot is one participant's projection of the federal funds rate (%) at the end of each year and in the longer run.
March December median December median
Scroll the chart sideways for the later years.
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 maintain the interest rate paid on reserve balances at 4.4 percent, effective
January 30,March 20, 2025. - 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
January 30,March 20, 2025, 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 4-1/4 to
4‑1/24-1/2 percent. - Conduct standing overnight repurchase agreement operations with a minimum bid rate of 4.5 percent and with an aggregate operation limit of $500 billion.
- Conduct standing overnight reverse repurchase agreement operations at an offering rate of 4.25 percent and with a
per‑counterpartyper-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 March that exceeds a cap of $25 billion per month. Beginning on April 1, 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$5 billion per month. Redeem Treasury coupon securities up tothisthese monthlycapcaps and Treasury bills to the extent that coupon principal payments are less than the monthlycap.caps. - Reinvest the amount of principal payments from the Federal Reserve's holdings of agency debt and agency
mortgage‑backedmortgage-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.reasons." - In a related action, the Board of Governors of the Federal Reserve System voted unanimously to approve the establishment of the primary credit rate at the existing level of 4.5 percent.
Engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve's agency MBS transactions."
Press conference
March 19, 2025, 2:30 p.m. ET · Read the transcript
What Powell said that the statement didn't
- The chair said the median FOMC participant projects GDP to rise 1.7 percent this year, lower than the December projection, and a bit below 2 percent over the next two years.
- The chair said the median projection for the unemployment rate in the Summary of Economic Projections is 4.4 percent at the end of this year and 4.3 percent over the next two years.
- The chair said the median projection for total PCE inflation is 2.7 percent this year and 2.2 percent next year, a little higher than projected in December, with 2027 at the 2 percent objective.
- The chair said the median participant projects the appropriate federal funds rate will be 3.9 percent at the end of this year and 3.4 percent at the end of next year, unchanged from December.
- The chair said the Federal Reserve's five-year review of its monetary policy framework will include Fed Listens events and a research conference in May, with the review intended to wrap up by late summer.
Summary generated automatically from the transcript and the statement.