FRB Update (Dec-16-2015): FOMC Announcement and Economic Forecasts

yellen-chairAs expected the Fed raised its interest rates and it looks like any further action taken will be gradual as it is willing to remain accommodative. Regarding its two mandates of full employment and target inflation @ 2.0%, it currently perceives “considerable” improvement occurring in the labor market and is “reasonably confident” over the medium term that inflation will eventually revert to its target level as the declines in oil and import prices reverse. (See tables and graph below for interest rate changes and economic forecasts.)


Interest Rate Policies

Interest Rate

Previous Policy

Current Policy

Fed Funds Target Rate 0.00 to 0.25 0.25 to 0.50
Discount Rate 0.75 1.00
Excess Reserve Rates 0.25 0.50
Reverse Repo Rate 0.05 0.25


Economic Forecasts

Click to enlarge




Leave a Reply

Your email address will not be published. Required fields are marked *