2016 Economic Calendar
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FOMC Meeting Announcement  
Released On 3/16/2016 2:00:00 PM
PriorConsensusActual
Federal Funds Rate - Target Level0.25 to 0.50 %0.25 to 0.50 %0.25 to 0.50 %

Highlights
Citing global and financial risks right at the very top, the Fed in its FOMC statement sounds dovish, issuing no rate hike as was expected and pulling back its own rate hike expectations by 50 basis points to match market expectations, from 1.4 percent for the funds rate at year-end to 0.9 percent. The assessment of the economy has been downgraded from "solid" in the January statement to "moderate" in today's statement. Business investment is no longer described as "advancing" but instead as "soft" as are net exports. Household spending is once again described as moderate but the description of the jobs market remains "strong".

Inflation is no longer described as moving lower but as remaining low in what hints at limited progress toward the Fed's 2 percent goal. Though the statement does note some pick up in recent months, the projection for this year's PCE core rate is unchanged at plus 1.6 percent. There is no change in the assessment of inflation expectations.

There is certainly no signal in this report that a rate hike is likely at the next meeting in April or even in June, only that there will likely be two 1/4 point moves before year end. In a note on a change in prior language, today's statement excludes any reference to the balance of risks between economic activity and the labor market. Today's vote, 9 to 1, was not unanimous with the dovish tone leaving behind Kansas City's Esther George who lived up to her hawkish reputation and called for an immediate 25 basis point hike.

Consensus Outlook
The Federal funds rate target is expected to remain unchanged at a range between 0.25 to 0.50 percent, where it was set at the December FOMC. Though some Fed officials have been pointing to the strength of recent inflation data, there are no expectations among Econoday's 12 forecasters for any change at the March meeting. Global risks were not cited in the December statement but they were called up at the January meeting and are expected to be pointed to again, as the pivotal reason for not raising rates. Today's statement will include quarterly economic forecasts and will be followed by Janet Yellen's press conference.

Definition
The FOMC meeting announcement is a policy statement issued at the conclusion of each meeting of the Federal Open Market Committee. It offers updates on economic conditions with special focus on the health of the labor market and the latest on inflation. It also updates the status of the federal funds target which is the FOMC's official policy interest rate. This rate is expressed within a range, such as 1.75 to 2.00 percent. The center of this range is the implied target. The higher this target, the more restrictive monetary policy becomes, the lower this target, the more accommodative policy becomes. Other policy tools are also discussed in the meeting announcement including updates on direct purchases of Treasuries and mortgage-backed securities. Debate is not offered in the statement, just the consensus view is expressed, though the statement does list the total committee vote and how each member voted.  Why Investors Care
 
[Chart]
The Fed closely monitors the core PCE price index to indicate whether or not policy is approximately correct, overly accommodative, or too restrictive. The PCE price index is preferred to the CPI because it is more closely aligned to the cost of living than the CPI (which measures a fixed basket of goods & services.) This chart covers monthly data and the fed funds target rate reflects the monthly average. As such, it will not correspond to the most recent fed funds rate target announced by the Fed.
Data Source: Haver Analytics
 

2016 Release Schedule
Released On: 1/273/164/276/157/279/2111/212/14
 


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