Key messages from last US interest rate statement in 2024

The Fed stated in its interest rate statement that “recent data have shown continued progress in economic activity. Labor market conditions have also shown significant improvement with the unemployment rate rising, although it has not reached very high levels. Inflation has shown a decline, approaching the central bank’s target of 2.00%, but it remains elevated.”

“The Federal Open Market Committee is committed to achieving maximum employment and the 2.00% inflation target over the long run. The Committee sees the risks to achieving its employment and inflation goals as balanced. However, the outlook for the economy remains uncertain, leading the Committee to be prepared to respond to any upside or downside risks to the Fed’s dual mandate,” the statement added.

The statement continued: “To support its goals, the Committee decided to reduce the interest rate by 0.25% to 4.25% on deposits and 4.50% on lending. While assessing the size and timing of the next move in the interest rate, the Committee will evaluate incoming economic data, any evolving developments in the economic outlook, and the balance of risks. The Committee will also continue to reduce its balance sheet by selling assets previously purchased by the Fed, including Treasury securities and mortgage-backed securities. The Committee reaffirms its commitment to achieving maximum employment and returning inflation to its 2.00% objective.”

The Fed indicated in its interest rate statement that “the Committee will continue to monitor incoming data for evidence bearing on the outlook. The Committee will remain prepared to adjust the stance of monetary policy as appropriate if incoming information suggests that actual or expected developments are likely to warrant a change in the path of the target range for the federal funds rate. In assessing the appropriate stance of monetary policy, the Committee will take into account a wide range of information, including measures of labor market conditions, inflation pressures and inflation expectations, and financial and international developments.”