Thursday, August 6, 2020

Comparing the US Federal Reserve’s views on jobs and economy

By on November 2, 2016

WASHINGTON - DECEMBER 16:  Flags fly over the Federal Reserve Building on December 16, 2008 in Washington, D.C. The Fed began its last meeting of 2008 today, where it is expected to announced another reduction in the key interest rate, amongst other measures meant to stimulate the economy.  (Photo by Mark Wilson/Getty Images)

WASHINGTON – DECEMBER 16: Flags fly over the Federal Reserve Building on December 16, 2008 in Washington, D.C.  (Photo by Mark Wilson/Getty Images)

A comparison of the Federal Reserve’s statements from its two-day meeting that ended Wednesday and its meeting Sept. 20-21:

RATE HIKE TIMING:

Now: The Fed now simply needs just “some” additional evidence that the economy is improving: The Fed “judges that the case for an increase in the federal funds rate has continued to strengthen but decided, for the time being, to wait for some further evidence of continued progress toward its objectives.”

Then: The Fed “judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives.”

INFLATION:

October: The statement removed a reference to inflation “remaining low,” a sign that Fed policymakers see inflation firming: “Inflation is expected to rise to 2 percent over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further.”

September: “Inflation is expected to remain low in the near term, in part because of earlier declines in energy prices, but to rise to 2 percent over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further.”

MORE ON INFLATION:

October: “Inflation has increased somewhat since earlier this year but is still below the Committee’s 2 percent longer-run objective, partly reflecting earlier declines in energy prices and in prices of non-energy imports.”

September: “Inflation has continued to run below the Committee’s longer-run objective, partly reflecting declines in energy prices and in prices of non-energy imports.”

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