The Federal Reserve announced its highly anticipated September interest rate decision. The Federal Open Market Committee (FOMC) raised the policy rate by 25 basis points to the 3.75-4.00 percent range. The decision was made with the unanimous support of all Committee members, with a vote of 12 to 0.
The Fed’s statement noted that economic activity continues to expand at a solid pace, but uncertainty remains high, partly due to geopolitical developments. The shift from a direct reference to the conflict in the Middle East in the previous statement to the broader phrase “geopolitical developments” was noteworthy.
The central bank also added that employment growth was in line with labor market growth and that the unemployment rate had changed very little. Inflation, however, remained at high levels.
One of the most notable changes in the decision text was seen in the statements regarding inflation. The Fed removed the previous statement that price increases were due to supply shocks in some sectors. Instead, it stated, “Today’s policy action will support inflation returning to the Committee’s 2 percent target more timely.”
The Fed also reinforced its commitment to price stability with the statement, “The Committee will ensure price stability.”
*This is not investment advice.
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