FOMC Results (January 2024)

Meeting Date: January 30-31, 2024

Federal Open Market Committee (FOMC) Meeting Results

FOMC meeting highlights:

1. The Fed maintained its Target Fed Funds rate at the current rate of 5.25% to 5.50%. This meeting’s vote was unanimous!
2. The FOMC, which began to shrink its securities portfolio on June 1, 2022, announced it will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve's Balance Sheet that it announced at the May 2022 FOMC meeting.
3. The Committee emphasized that it is strongly committed to returning inflation to its 2% objective.
4. Federal Open Market Committee reaffirms its "Statement on Longer-Run Goals and Monetary Policy Strategy”.
5. The FOMC attempted to improve its public image, which had been tarnished recently by revelations of questionable private investment activities by a number of Federal Reserve staff by issuing new, tougher guidelines for such activities.

Economic highlights:  

• Recent indicators suggest that economic activity has been expanding at a solid pace. Job gains have moderated since early last year but remain strong, and the unemployment rate has remained low.
• Inflation has eased over the past year but remains elevated.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run. The Committee judges that the risks to achieving its employment and inflation goals are moving into better balance.
• The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks.

Announcements:  

• “In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 5.25% to 5.5%.
• In considering any 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 does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.
• In addition, the Committee 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% 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.”
• This meeting served as the FOMC’s annual organization meeting. The committee unanimously reaffirmed its "Statement on Longer-Run Goals and Monetary Policy Strategy," often known as the consensus statement, which articulates its approach to monetary policy.
• The reaffirmed statement is identical to the version initially adopted in August 2020. The Committee first adopted a similar statement in 2012. The major focus of this statement can be summarized by the opening paragraph:
  
  “The Federal Open Market Committee (FOMC) is firmly committed to fulfilling its statutory mandate from the Congress of promoting maximum employment, stable prices and moderate long-term interest rates. The Committee seeks to explain its monetary policy decisions to the public as clearly as possible. Such clarity facilitates well-informed decision making by households and businesses, reduces economic and financial uncertainty, increases the effectiveness of monetary policy, and enhances transparency and accountability, which are essential in a democratic society.”


• The FOMC issued a statement aimed at increasing public confidence in its staff and officials. The new development is in response to several Fed officials who have engaged in personal trading activities which cast the Fed in a poor light. Today statement attempts to regain public confidence. The FOMC issued the following statement.
  
  The Federal Open Market Committee on Wednesday announced updates that further enhance its policy on investment and trading. The policy, which was first adopted in 2022, aims to support public confidence in the impartiality and integrity of the Committee's work by guarding against even the appearance of any conflict of interest.
  
  The updates will increase the number of Federal Reserve System staff who will be covered by the most stringent restrictions on investment and trading activities and will tighten restrictions on all staff with access to confidential FOMC information. Additionally, the updated policy supports a new compliance regime where staff with access to the most sensitive FOMC information may be directed to submit brokerage statements or other securities transaction statements to verify the accuracy of their financial disclosures.
  
  The existing policy already prohibits senior Federal Reserve officials involved in monetary policy decision making from purchasing individual stocks or sector funds; holding investments in individual bonds, agency securities, cryptocurrencies, commodities or foreign currencies; entering into derivatives contracts; and engaging in short sales or purchasing securities on margin. The policy also requires those officials to provide 45-days' non-retractable notice for securities transactions and receive prior approval.
  
  The new restrictions in the policy are effective on June 30, 2024.”

Voting results:  

Next meeting: