ECONOMYNEXT – The US Federal Reserve kept policy rates unchanged at 4.25-4.50 percent, saying economic activity was solid, unemployment was low and inflation was somewhat high shortly after President Donald Trump slammed Jerome Powell as stupid.
“Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace,” the Federal Reserve Open Market Committee statement said.
“The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated.”
In the first quarter a surge of imports, due to Trump tariffs reduced statistical domestic value added.
Shortly before the Fed decision, Trump said Powell was stupid not cutting rates.
RELATED : Trump slams Powell as ‘stupid person’, says rates should be 2-pct lower
The Fed said it will continue to reduce holdings of Treasury securities, agency debt and agency mortgage backed securities known as quantitative tightening.
Despite the sell down of Treasury securities the excess liquidity has remained static for many months.
The full statement is reproduced below:
Federal Reserve issues FOMC statement
Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace. The unemployment rate remains low, 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. Uncertainty about the economic outlook has diminished but remains elevated. 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. 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; Jeffrey R. Schmid; and Christopher J. Waller.
