The Federal Reserve left the target range for the federal funds rate unchanged at 3.50–3.75% on 29 July, with three regional Reserve Bank presidents dissenting in favour of an immediate increase. The Federal Open Market Committee's decision was taken by a 9-3 vote.
Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan preferred to raise the target range by a quarter of a percentage point at the meeting, according to the statement.
STATEMENT KEEPS TO THE FACTS
The statement said economic activity was expanding at a solid pace despite elevated uncertainty owing in part to the conflict in the Middle East, and that productivity growth and capital investment were strong. Job gains had kept pace with the workforce and the unemployment rate had changed little, while inflation remained elevated relative to the 2% goal, in part reflecting supply shocks that had driven price increases in certain sectors, including energy. The Committee said it was continuing its policy of maintaining ample reserves in the banking system.
Kevin Warsh, presiding over his second FOMC meeting as Chair, told reporters that the Committee remained resolute. "We will deliver price stability," he said, adding that the policy statement "conveys just the facts" and was steering clear of forecasting.
WARSH REAFFIRMS 2% INFLATION TARGET
Warsh used his opening remarks to rule out any tolerance for inflation above the Fed's objective. "There is no soft inflation target; there is no soft implicit target—not on this Committee's watch. There's only a target, and it's 2 percent," he said.
He noted that nominal and real yields had risen materially across the Treasury curve since the previous meeting, and said that where necessary and appropriate the Committee "will not hesitate to act".