FOMC’s statement: Inflation remains elevated

Recent data suggests that economic activity expanded at a strong pace in the third quarter, according to the FOMC statement released on Wednesday, Nov. 1, following the committee’s decision to leave interest rate policy unchanged.

The following FOMC members voted in favour of the monetary policy decision: Philip N. Jefferson, Neel Kashkari, Adriana D. Kugler, Lorie K. Logan, Michael S. Barr, Michelle W. Bowman, Lisa D. Cook, Austan D. Goolsbee, Patrick Harker, and Christopher J. Waller.

Key Quotes

Job gains have slowed in recent monthsmoderated since earlier in the year but remain strong, and the unemployment rate has remained low. Inflation remains elevated.

The US banking system is sound and resilient. Tighter financial and credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation.

The extent of these effects remains uncertain. The Committee remains highly attentive to inflation risks.

FOMC seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent.

FOMC will continue to assess additional information and its implications for monetary policy.

In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.

FOMC will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective.

FOMC will continue to monitor the implications of incoming information for the economic outlook.

FOMC 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.

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.