What are Fed's decision on 06/13/2018
After increasing the base interest rate by 25 basis points to the target range of 1.75% -2.00%, the Federal Open Market Committee of the US Federal Reserve commented on its decision and the current situation in the country:
The Fed noted a significant upsurge in the economic activity and a further improvement in the labor market, thanks to the positive growth of jobs in recent months and the decline in unemployment.
The Federal Reserve also mentioned that the latest data presented growth in family spending has increased substantially, while business investment continued to expand essentially.
The Fed continues to assess long-term inflation expectations as stable. At the same time, the 12-month-based general inflation and basic inflation, excluding energy and food prices, came close to 2%.
The Fed strives, in accordance with its mandate, to promote maximum employment and price stability. The Fed expects that further gradual increases in the target interest rate range for federal funds will be carried out in line with the steady economic growth activity, while the strengthening of the labor market and inflation is close to the federal target of 2% in the medium-term. Risks for economic prospects look quite balanced.
Taking into account the already achieved and expected parameters of the labor market and inflation, the Federal Reserve decided to raise the target range of interest rates for federal funds to 1.75% -2.00%. The basic principles of monetary policy will remain rather flexible, thereby supporting the strengthening labor market and the sustainable return of inflation to the level of 2%.
In determining the timing and extent of future regulation, the target interest rate range for federal funds of the Fed will be guided by both achieved and expected economic growth in relation to its targets of maximum employment and inflation level at 2%. This approach will be based on a wide range of information, including labor market conditions, inflationary pressures and inflation outlook, financial and international developments.
The current foundations of monetary policy were adopted unanimously by eight members of the Federal Open Market Committee of the US Federal Reserve.
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