FOMC Monetary Policy Statement Sep Meeting - Text>

--July 26 Statement Follows for Comparison     

     WASHINGTON (MNI) - The following is the complete text of the FOMC 

statement issued Wednesday. The July 26 statement follows for 

comparison: 

     Information received since the Federal Open Market Committee met in 

July indicates that the labor market has continued to strengthen and 

that economic activity has been rising moderately so far this year. Job 

gains have remained solid in recent months, and the unemployment rate 

has stayed low. Household spending has been expanding at a moderate 

rate, and growth in business fixed investment has picked up in recent 

quarters. On a 12-month basis, overall inflation and the measure 

excluding food and energy prices have declined this year and are running 

below 2 percent. Market-based measures of inflation compensation remain 

low; survey-based measures of longer-term inflation expectations are 

little changed, on balance. 

     Consistent with its statutory mandate, the Committee seeks to 

foster maximum employment and price stability. Hurricanes Harvey, Irma, 

and Maria have devastated many communities, inflicting severe hardship. 

Storm-related disruptions and rebuilding will affect economic activity 

in the near term, but past experience suggests that the storms are 

unlikely to materially alter the course of the national economy over the 

medium term. Consequently, the Committee continues to expect that, with 

gradual adjustments in the stance of monetary policy, economic activity 

will expand at a moderate pace, and labor market conditions will 

strengthen somewhat further. Higher prices for gasoline and some other 

items in the aftermath of the hurricanes will likely boost inflation 

temporarily; apart from that effect, inflation on a 12-month basis is 

expected to remain somewhat below 2 percent in the near term but to 

stabilize around the Committees 2 percent objective over the medium 

term. Near-term risks to the economic outlook appear roughly balanced, 

but the Committee is monitoring inflation developments closely. 

     In view of realized and expected labor market conditions and 

inflation, the Committee decided to maintain the target range for the 

federal funds rate at 1 to 1-1/4 percent. The stance of monetary policy 

remains accommodative, thereby supporting some further strengthening in 

labor market conditions and a sustained return to 2 percent inflation. 

     In determining the timing and size of future adjustments to the 

target range for the federal funds rate, the Committee will assess 

realized and expected economic conditions relative to its objectives of 

maximum employment and 2 percent inflation. This assessment will take 

into account a wide range of information, including measures of labor 

market conditions, indicators of inflation pressures and inflation 

expectations, and readings on financial and international developments. 

The Committee will carefully monitor actual and expected inflation 

developments relative to its symmetric inflation goal. The Committee 

expects that economic conditions will evolve in a manner that will 

warrant gradual increases in the federal funds rate; the federal funds 

rate is likely to remain, for some time, below levels that are expected 

to prevail in the longer run. However, the actual path of the federal 

funds rate will depend on the economic outlook as informed by incoming 

data. 

     In October, the Committee will initiate the balance sheet 

normalization program described in the June 2017 Addendum to the 

Committees Policy Normalization Principles and Plans. 

     Voting for the FOMC monetary policy action were: Janet L. Yellen, 

Chair; William C. Dudley, Vice Chairman; Lael Brainard; Charles L. 

Evans; Stanley Fischer; Patrick Harker; Robert S. Kaplan; Neel Kashkari; 

and Jerome H. Powell. 

-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*- 

     The following is the text of the FOMC statement released after the 

policy meeting held July 25-26, 2017:

     Information received since the Federal Open Market Committee met in 

June indicates that the labor market has continued to strengthen and 

that economic activity has been rising moderately so far this year. Job 

gains have been solid, on average, since the beginning of the year, and 

the unemployment rate has declined. Household spending and business 

fixed investment have continued to expand. On a 12-month basis, overall 

inflation and the measure excluding food and energy prices have declined 

and are running below 2 percent. Market-based measures of inflation 

compensation remain low; survey-based measures of longer-term inflation 

expectations are little changed, on balance. 

     Consistent with its statutory mandate, the Committee seeks to 

foster maximum employment and price stability. The Committee continues 

to expect that, with gradual adjustments in the stance of monetary 

policy, economic activity will expand at a moderate pace, and labor 

market conditions will strengthen somewhat further. Inflation on a 

12-month basis is expected to remain somewhat below 2 percent in the 

near term but to stabilize around the Committees 2 percent objective 

over the medium term. Nearterm risks to the economic outlook appear 

roughly balanced, but the Committee is monitoring inflation developments 

closely. 

     In view of realized and expected labor market conditions and 

inflation, the Committee decided to maintain the target range for the 

federal funds rate at 1 to 1-1/4 percent. The stance of monetary policy 

remains accommodative, thereby supporting some further strengthening in 

labor market conditions and a sustained return to 2 percent inflation. 

     In determining the timing and size of future adjustments to the 

target range for the federal funds rate, the Committee will assess 

realized and expected economic conditions relative to its objectives of 

maximum employment and 2 percent inflation. This assessment will take 

into account a wide range of information, including measures of labor 

market conditions, indicators of inflation pressures and inflation 

expectations, and readings on financial and international developments. 

The Committee will carefully monitor actual and expected inflation 

developments relative to its symmetric inflation goal. The Committee 

expects that economic conditions will evolve in a manner that will 

warrant gradual increases in the federal funds rate; the federal funds 

rate is likely to remain, for some time, below levels that are expected 

to prevail in the longer run. However, the actual path of the federal 

funds rate will depend on the economic outlook as informed by incoming 

data. 

     For the time being, the Committee is maintaining its existing 

policy of reinvesting principal payments from its holdings of agency 

debt and agency mortgage-backed securities in agency mortgage-backed 

securities and of rolling over maturing Treasury securities at auction. 

The Committee expects to begin implementing its balance sheet 

normalization program relatively soon, provided that the economy evolves 

broadly as anticipated; this program is described in the June 2017 

Addendum to the Committees Policy Normalization Principles and Plans. 

     Voting for the FOMC monetary policy action were: Janet L. Yellen, 

Chair; William C. Dudley, Vice Chairman; Lael Brainard; Charles L. 

Evans; Stanley Fischer; Patrick Harker; Robert S. Kaplan; Neel Kashkari; 

and Jerome H. Powell. 

--MNI Washington Bureau, Tel: +1 202-371-2121; email: 

dcoffice@marketnews.com

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