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Meeting Date: March 20, 2024
Federal Open Market Committee (FOMC) Meeting Results
FOMC meeting highlights:
- The Fed maintained its Target Fed Funds rate at the current rate of 5.25 – 5.50%. This meeting’s vote was unanimous.
- 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.
- The committee emphasized that it is strongly committed to returning inflation to its 2% objective.
Economic highlights:
Economic activity continues to grow at a solid pace, job gains are strong, unemployment remains low, but inflation remains problematic.
- “Recent indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained 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:
The Fed funds rate remains unchanged at a range of 5.25% to 5.50% and balance sheet reductions continue.
- “In support of its goals, the committee decided to maintain the target range for the federal funds rate at 5-1/4% to 5-1/2%.”
- “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.”
Summary of economic projections:
Economic projections from March 20, 2024, are shown in chart form below.
Interest rate forecasts:
The new dot plot from the March 19-20, 2024, FOMC meeting is shown below.
Implementation note:
The Federal Reserve has made the following decisions to implement the monetary policy stance announced by the Federal Open Market Committee in its statement on March 20, 2024:
- The Board of Governors of the Federal Reserve System voted unanimously to maintain the interest rate paid on reserve balances at 5.4% effective March 21, 2024.
- As part of its policy decision, the Federal Open Market Committee voted to direct the Open Market Desk at the Federal Reserve Bank of New York, until instructed otherwise, to execute transactions in the System Open Market Account in accordance with the following domestic policy directive:
"Effective March 21, 2024, the Federal Open Market Committee directs the Open Market Desk to:- Undertake open market operations as necessary to maintain the federal funds rate in a target range of 5-1/4% to 5-1/2%.
- Conduct standing overnight repurchase agreement operations with a minimum bid rate of 5.5% and with an aggregate operation limit of $500 billion.
- Conduct standing overnight reverse repurchase agreement operations at an offering rate of 5.3% and with a per-counterparty limit of $160 billion per day.
- Roll over at auction the amount of principal payments from the Federal Reserve's holdings of Treasury securities maturing in each calendar month that exceeds a cap of $60 billion per month. Redeem Treasury coupon securities up to this monthly cap and Treasury bills to the extent that coupon principal payments are less than the monthly cap.
- Reinvest into agency Mortgage-Backed Securities (MBS) the amount of principal payments from the Federal Reserve's holdings of agency debt and agency MBS received in each calendar month that exceeds a cap of $35 billion per month.
- Allow modest deviations from stated amounts for reinvestments, if needed for operational reasons.
- Engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve's agency MBS transactions."
- In a related action, the Board of Governors of the Federal Reserve System voted unanimously to approve the establishment of the primary credit rate at the existing level of 5.5%.
Voting results:
No dissenting votes
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Michael S. Barr; Raphael W. Bostic; Michelle W. Bowman; Lisa D. Cook; Mary C. Daly; Philip N. Jefferson; Adriana D. Kugler; Loretta J. Mester; and Christopher J. Waller.
Next meeting:
April 30- May 1, 2024