May 4, 2022
The Federal Reserve has issued a statement to the FOMC
For launch at 14:00 EDT
Although overall economic activity declined in the first quarter, household spending and investment in fixed-line enterprises remained strong. Job growth has been steady in recent months, and unemployment has fallen sharply. Inflation remains high, reflecting pandemic supply and demand imbalances, higher energy prices and wider price pressures.
Russia’s invasion of Ukraine is causing great human and economic difficulties. The consequences for the US economy are very uncertain. The invasion and related events are creating additional upward pressures on inflation and are likely to weigh on economic activity. In addition, the blockade related to COVID in China is likely to exacerbate supply chain disruptions. The Committee is extremely vigilant about inflation risks.
The committee aims to achieve maximum employment and inflation of 2 percent in the long run. With the appropriate strengthening of the monetary policy stance, the Committee expects inflation to return to its 2% target and the labor market to remain strong. In support of these objectives, the Committee has decided to raise the target range for interest rates on federal funds to 3/4 to 1% and expects that the current increases in the target range will be appropriate. In addition, the Committee decided to start reducing its holdings of government securities and agency debt and agency-backed securities on 1 June, as described in the Federal Reserve Balance Sheet Reduction Plans issued in connection with with this statement.
In assessing the appropriate monetary policy stance, the Committee will continue to monitor the impact of inputs on economic prospects. The Committee will be ready to adjust the monetary policy stance as appropriate if risks arise that could impede the achievement of the Committee’s objectives. The Committee’s assessments will take into account a wide range of information, including indications of public health, labor market conditions, inflationary pressures and inflation expectations, as well as financial and international trends.
Voted on monetary policy Jerome H. Powell, President; John C. Williams, Vice President; Michelle W. Bowman; Lael Brainard; James Bullard; Esther L. George; Patrick Harker; Loretta J. Master; and Christopher J. Waller. Patrick Harker voted to replace this assembly.
Implementing Note issued on 4 May 2022
Last updated: 04 May 2022
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