To no one’s surprise the FOMC left the federal funds rate unchanged; the language used to communicate the (non-)action hedged.
The Federal Reserve’s monetary policy setting committee, the Federal Open Market Committee (FOMC), concluded the April meeting and released the statement announcing no change in the federal funds rate, maintaining the current 0.25% to 0.50% target range. The statement went on to acknowledge that economic growth has slowed but emphasized continued labor market improvement; acknowledged household spending slowed but emphasized rising household income and high consumer sentiment. The April statement omitted the positive language from March emphasizing the pick-up in inflation in recent months, but repeated that inflation has continued to run below the committee’s 2% target. Global economic and financial developments no longer pose mention-worthy risks, as in March, but joined inflation on the list of factors to be monitored closely in April.
The vote count was unchanged from March, Esther George, president of the Kansas City Fed, was the only dissent, preferring a 0.25% increase in the funds rate target at this meeting.
The statement offered no hints about the FOMC’s intentions for the June meeting, preserving hike and no hike rationales. The minutes from the meeting, providing a fuller account of deliberations, released three weeks after each meeting, may offer additional insights, but until then, the message is unclear.