Breakdown of July FOMC Meeting: Rates Unchanged

As expected, the Federal Reserve’s (Fed) policymaking arm, the Federal Open Market Committee (FOMC), decided to keep rates unchanged at the conclusion of their two-day meeting. With no press conference from Fed Chair Janet Yellen and no new set of economic forecasts or “dot plots” from FOMC members, this meeting was all about the statement. Here is also a side-by-side comparison of the statement released today versus the statement released on June 15, 2016.

The FOMC upgraded its assessment of the economy versus the June statement, and noted that “near-term risks to the economic outlook have diminished.” However, the statement also used the phrase “monitor inflation indicators and global economic and financial developments” again, as it has in every FOMC statement this year, including twice in the March 2016 statement.

Importantly, the Fed did not drop any hints that a September rate hike was on the table. Considering that the next FOMC meeting (following the September meeting) is less than a week before the November elections, if the Fed does hike this year, it will likely be at the December meeting. We continue to expect that the Fed will hike rates once this year.

The next key event for Fed watchers is a speech by Fed Chair Janet Yellen at the Kansas City Fed’s Monetary Policy Symposium in Jackson Hole, WY, set for August 26, 2016. In the past, Fed chairs—notably Yellen’s predecessor Ben Bernanke—used Jackson Hole to communicate Fed policy intentions. The minutes of today’s meeting are due out on August 17, 2016. The next FOMC meeting, which will include a press conference from Yellen and a new set of economic forecasts and “dot plots,” is on September 20–21, 2016.

Click here for the FOMC schedule.


The economic forecasts set forth in the presentation may not develop as predicted.

The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security.

The Federal Open Market Committee (FOMC) is the branch of the Federal Reserve Board that determines the direction of monetary policy. The eleven-person FOMC is composed of the seven-member board of governors, and the five Federal Reserve Bank presidents. The president of the Federal Reserve Bank of New York serves continuously, while the presidents of the other regional Federal Reserve Banks rotate their service in one-year terms.

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