Federal Reserve Board – Federal Reserve issues FOMC statement

Recent indicators point to a modest increase in spending and output. Job gains have picked up in recent months and are continuing at a strong pace; The unemployment rate remains low. Inflation persists.

The US banking system is strong and resilient. Recent developments are likely to result in tighter credit conditions for households and businesses and drag on economic activity, hiring and inflation. The extent of these effects is 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 4-3/4 to 5 percent. The Committee will closely monitor incoming information and assess the implications of monetary policy. The Committee estimates that some additional policy tightening may be appropriate to achieve a monetary policy stance that is sufficiently restrictive to bring inflation back to 2 per cent over time. In determining the extent of future increases in the target range, 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 growth. 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.

Jerome H. Powell, Chairman, voting for monetary policy action; 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 March 22, 2023