Although overall economic activity edged down in the first quarter, household spending and business fixed investment rem
Posted: Thu May 26, 2022 7:34 am
Although overall economic activity edged down in the
first quarter, household spending and business fixed investment
remained strong. Job gains have been robust in recent months, and
the unemployment rate has declined substantially. Inflation remains
elevated, reflecting supply and demand imbalances related to the
pandemic, higher energy prices, and broader price
pressures.
The Committee seeks to achieve maximum employment and
inflation at the rate of 2 percent over the longer run. With
appropriate firming in the stance of monetary policy, the Committee
expects inflation to return to its 2 percent objective and the
labor market to remain strong. In support of these goals, the
Committee decided to raise the target range for the federal funds
rate to 3/4 to 1 percent and anticipates that ongoing increases in
the target range will be appropriate. In addition, the Committee
decided to begin reducing its holdings of Treasury securities and
agency debt and agency mortgage-backed securities on June 1, as
described in the Plans for Reducing the Size of the Federal
Reserve's Balance Sheet that were issued in conjunction with this
statement.
In assessing the appropriate stance of monetary policy,
the Committee will continue to monitor the implications of incoming
information for the economic outlook. The Committee would be
prepared to adjust the stance of monetary policy as appropriate if
risks emerge that could impede the attainment of the Committee’s
goals. The Committee's assessments will take into account a wide
range of information, including readings on public health, labor
market conditions, inflation pressures and inflation expectations,
and financial and international developments.
Question
What is one positive sign that the FOMC sees in the economy?
first quarter, household spending and business fixed investment
remained strong. Job gains have been robust in recent months, and
the unemployment rate has declined substantially. Inflation remains
elevated, reflecting supply and demand imbalances related to the
pandemic, higher energy prices, and broader price
pressures.
The Committee seeks to achieve maximum employment and
inflation at the rate of 2 percent over the longer run. With
appropriate firming in the stance of monetary policy, the Committee
expects inflation to return to its 2 percent objective and the
labor market to remain strong. In support of these goals, the
Committee decided to raise the target range for the federal funds
rate to 3/4 to 1 percent and anticipates that ongoing increases in
the target range will be appropriate. In addition, the Committee
decided to begin reducing its holdings of Treasury securities and
agency debt and agency mortgage-backed securities on June 1, as
described in the Plans for Reducing the Size of the Federal
Reserve's Balance Sheet that were issued in conjunction with this
statement.
In assessing the appropriate stance of monetary policy,
the Committee will continue to monitor the implications of incoming
information for the economic outlook. The Committee would be
prepared to adjust the stance of monetary policy as appropriate if
risks emerge that could impede the attainment of the Committee’s
goals. The Committee's assessments will take into account a wide
range of information, including readings on public health, labor
market conditions, inflation pressures and inflation expectations,
and financial and international developments.
Question
What is one positive sign that the FOMC sees in the economy?