**MNI POLICY: FOMC On Hold; Many See 50bp Cut This Year>

--8 Officials See No Change In Rates This Year; 7 See 2 Cuts

--Will Act 'As Appropriate' To Sustain Expansion

--Uncertainties To Outlook Increased

By Jean Yung

     WASHINGTON (MNI) - The following are the key points from the 

FOMC statement released Wednesday:

     --Fed held rates steady, but officials were about evenly split 

between no change in rates and 50 bps in cuts by the end of the year. 

St. Louis Fed President Jim Bullard dissented in favor of an immediate 

rate cut. 

     --Revised policy guidance to say it will "act as appropriate" to 

sustain the expansion. Uncertainties have "increased," it said, and the 

FOMC intends to "closely monitor" incoming information for implications 

to the economic outlook. Removed previous guidance that it will be 

"patient." 

     --7 out of 17 officials saw rates falling to a 1.75%-2.00% range by 

year-end and staying there in 2020. Officials still see rates rising 

over the medium term, though estimates of the neutral rate fell a tad to 

2.4% to 3.3%, with a median of 2.5%. 

     --Inflation is running below 2% and inflationary pressures 

are "muted." Market-based measures of inflation compensation have 

"declined" while survey-based measures of inflation expectations are 

"little changed." Projections for core PCE fell to 1.8% the year and 

1.9% next, before hitting 2.0% in 2021.

     --Downgraded the economic assessment slightly to say that growth 

was "moderate" instead of "solid" and business fixed investment have 

been "soft." Still, the labor market remains strong and job gains have 

been solid, and household spending appears to have picked up. 

     --No change to balance sheet policy or IOER rate. 

--MNI Washington Bureau, Tel: +1 202-371-2121; email: dcoffice@marketnews.com

     ** MNI Washington Bureau: 202-371-2121 ** 

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