Federal Reserve Board – Federal Reserve issues FOMC statement

Economic activity expanded at a modest pace in the first quarter. Job gains have strengthened in recent months, and the unemployment rate remains low. Inflation persists.

The US banking system is strong and resilient. The tighter credit conditions for households and businesses are likely to have an impact on economic activity, hiring and inflation. The extent of these effects remains uncertain. The Committee remains extremely vigilant to inflation risks.

The committee seeks to achieve maximum employment and inflation at 2 percent in the long run. In support of these goals, the Committee decided to increase the target range for the federal funds rate from 5 to 5-1/4 percent. The Committee will closely monitor incoming information and assess the implications of monetary policy. In determining the extent to which additional policy firming may be appropriate to bring inflation back to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the degree to which monetary policy affects economic activity and inflation. and economic and financial developments. In addition, the Committee will continue to reduce its holdings of Treasury securities and agency loans and agency mortgage-backed securities, as described in its previously announced plans. The Committee remains firmly committed to returning inflation to its target of 2 per cent.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the effects of incoming information on the economic outlook. The Committee will be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the achievement of the Committee’s objectives. The Committee’s assessment will take into account a wide range of information, including labor market conditions, inflationary pressures and inflation expectations, and financial and international developments.

Those who voted for the monetary policy action included Jerome H. Powell, Chairman; John C. Williams, Vice President; Michael S. Barr; Michelle W. Bowman; Lisa D. cook; Austin D. Golsby; Patrick Harker; Philip Ann Jefferson; Neel Kashkari; Laurie’s Logan; and Christopher J. Waller.

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Implementation Note issued on May 3, 2023