**MNI POLICY: FOMC Signals On Hold Through 2020; No Cuts in Dots>

--Only Four of 17 Policymakers See Hike in 2020

--No Policymaker Projects Rate Cuts In Next 3 Years

--Reference to Uncertainties Over Outlook Deleted

By Jean Yung

     WASHINGTON (MNI) - Federal Reserve officials on Wednesday 

unanimously agreed to hold benchmark short-term interest rates steady in 

a 1.5% to 1.75% target range, with the vast majority projecting no 

change in rates through 2020. 

     In their last meeting of the year, all 17 Fed officials viewed 

current rates as appropriate and the economic outlook as little changed, 

compared to October. Four of 17 penciled in a quarter-point rate hike 

next year but none forecast a fourth cut. 

     "The Committee judges that the current stance of monetary policy is 

appropriate to support sustained expansion of economic activity, strong 

labor market conditions, and inflation near the Committee's symmetric 2 

percent objective," the Fed said in its policy statement. 

     A specific reference to "uncertainties about this outlook" that 

had accompanied the three rate cuts earlier this year was deleted, 

though the statement continued to reference "global developments and 

muted inflation pressures" as items officials are monitoring. 

     The following are other takeaways from the statement and economic 

projections: 

     --12 officials see reversing at least some of this year's rate cuts 

by 2021. The rest see maintaining the current rate target. 

     --The longer run rate of unemployment was revised down a tenth to 

4.1% from 4.2% earlier. Officials expect the unemployment rate to stay 

at 3.5% next year before rebounding slightly to 2.7% by 2022. 

     --Projections for core PCE inflation were cut to 1.6% this year 

from 1.8% in October, but little changed in other years. Most officials 

see trend inflation returning to 2.0% by 2021. 

     --The review of the economic situation in the policy statement saw 

no changes. The job market "remains strong," economic activity is rising 

at a "moderate rate" and inflation is "running below 2 percent." 

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

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

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