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The Federal Reserve left the target range for its federal funds rate unchanged at 1.5-1.75 percent on December 11th 2019, following a 25bps cut in the October meeting. The decision came in line with market expectations. Policymakers consider the current stance of monetary policy appropriate to support sustained growth, strong labor market conditions, and inflation near the 2% target. The central bank kept its growth forecasts unchanged for this year at 2.2 percent; 2 percent for 2020; 1.9 percent for 2021; and 1.8 percent for 2022. Inflation is seen at 1.5 percent in 2019; 1.9 percent in 2020; 2 percent in 2021; and 2 percent in 2022; all unchanged from the September projection. Regarding the fed funds rate, most participants expect no changes in 2020 although a hike is still seen in 2021. In the September projection, more participants expected a hike in 2020.

The Federal Reserve is expected to leave the target range for its federal funds rate unchanged at 1.5-1.75 percent today at 2:00 PM EST time, following a 25bps cut in the October meeting. Investors will also check the latest FOMC economic projections through 2022 and the Fed Chair Jerome Powell's press conference at 2:30 PM EST time for further clues on the economic outlook. During his testimony before the House Budget Committee last month, Fed Chair said that there’s nothing that’s really booming now that would want to bust and that the national debt and deficit do not pose any immediate threats for a “day of reckoning”, suggesting no further rate cuts should be expected in the near future.

The Fed considers that the current fed funds rate of 1.5-1.75% will remain appropriate, as long as incoming information about the economy did not result in a reassessment of the economic outlook, minutes from the last FOMC meeting showed, suggesting no further rate cuts should be expected in the near future.

If you look at today’s economy, there’s nothing that’s really booming now that would want to bust, Fed Chair Powell said during the second day of testimony before House Budget Committee, suggesting that the country’s economic expansion is sustainable. Fed Chair also said that the national debt and deficit do not pose any immediate threats for a “day of reckoning.”

The Fed sees the current stance of monetary policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with the outlook of moderate economic growth, a strong labor market, and inflation near the 2 percent objective, Fed Chair said in prepared remarks to a US Congress committee, suggesting the central bank will leave the fed funds rate on hold for some time. Fed Chair also showed concerns about the current fiscal policy and said that the federal budget is on an unsustainable path, with high and rising debt.

The Federal Reserve slashed the target range for the federal funds rate to 1.5-1.75 percent during its October meeting, the third rate cut so far this year, amid muted inflation pressures and concerns about the economic outlook. But at the same time, the central bank signaled pause in easing cycle as the previous reference that it “will act as appropriate” to sustain the economic expansion was removed from the policy statement The decision was not unanimous, with two policymakers voting against lowering rates.