Federal Reserve Maintains Current Interest Rate

Today, the FOMC decided to leave our policy interest rate unchanged and to continue to reduce our securities holdings. As labor market tightness has eased, and inflation has declined over the past year, the risks to achieving our employment and inflation goals have moved toward better balance. The economic outlook is uncertain, however, and we remain highly attentive to inflation risks. We’ve stated that we do not expect it will be appropriate to reduce the target range for the federal funds rate until we have gained greater confidence that inflation is moving sustainably toward 2 percent. So far this year, the data have not given us that greater confidence. The most recent inflation readings have been more favorable than earlier in the year, however, and there has been modest further progress toward our inflation objective. We’ll need to see more good data to bolster our confidence that inflation is moving sustainably toward 2 percent. We know that reducing policy restraint too soon or too much could result in a reversal of the progress that we’ve seen on inflation. At the same time, reducing policy restraint too late or too little could unduly weaken economic activity and employment. Let me say that we welcome today’s reading and hope for more like that.