Federal Reserve Issues FOMC Statement
- Date: November 7, 2024
- Time: 19:00 EST
Summary
The Federal Reserve (Fed) released its Federal Open Market Committee (FOMC) statement on November 7, 2024, following a two-day meeting. The FOMC decided to raise the target range for the federal funds rate by 75 basis points to 3.75% – 4.00%. This is the sixth consecutive rate increase by the Fed this year, and the fourth 75 basis point hike in a row. The move was largely in line with market expectations.
Key Points
- Inflation: The FOMC noted that inflation remains elevated, well above the Fed’s target of 2%. The FOMC emphasized its “strong commitment to returning inflation to its 2 percent objective.”
- Rate Hikes: The FOMC stated that it “anticipates that ongoing increases in the target range will be appropriate.” This suggests that the Fed expects to continue raising interest rates in the coming months.
- Economic Growth: The FOMC acknowledged that economic activity has slowed in recent months. However, it stated that “with appropriate monetary policy action, the Committee expects inflation to return to its 2 percent objective and the labor market to remain strong.”
- Quantitative Tightening: The FOMC reiterated its plan to continue reducing its balance sheet. It stated that it will “continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities.”
Market Reaction
The release of the FOMC statement was met with mixed reactions in the markets. The US dollar initially strengthened against major currencies but later pared some of its gains. Stocks were mixed, with the Dow Jones Industrial Average rising slightly while the Nasdaq Composite declined. Treasury yields rose across the curve.
Outlook
The Fed’s latest decision signals that it remains committed to fighting inflation even as the risk of a recession grows. The FOMC’s statement suggests that further rate hikes are likely in the coming months. However, the pace of future rate increases may be slower than the recent 75 basis point hikes. The Fed will continue to monitor economic data and adjust its policy stance as necessary.
Federal Reserve issues FOMC statement
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