Highlights of the December 17, 2014 FOMC decision:
- FOMC says it can be ‘patient’ in approach to raising rates
- The Committee sees this guidance as consistent with its previous statement
- FOMC sees inflation rising to target as low oil impact ends
- Labor market ‘improved further’
- Declines to mention recent global market instability
- Fisher, Plosser and Kocherlakota dissented
- Median outlook for end-2015 Fed funds rate falls to 1.125%
- Range of labor market indicators suggests underutillization of labor resources continues to diminish
- Inflation running below goal partly on energy declines
- Market-based measures of inflation compensation have declined somewhat further
- Survey-based measures of longer-term inflation expectations have remained stable.
Key part of the statement:
Based on its current assessment, the Committee judges that it can be patient in beginning to normalize the stance of monetary policy. The Committee sees this guidance as consistent with its previous statement that it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time following the end of its asset purchase program in October, especially if projected inflation continues to run below the Committee’s 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored.
