2016 Economic Calendar
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FOMC Meeting Announcement  
Released On 7/27/2016 2:00:00 PM
PriorConsensusConsensus RangeActual
Federal Funds Rate - Target Level0.25 to 0.50 %0.375 %0.25 % to 0.50 %0.25 to 0.50 %

Highlights
The results of the July FOMC, which follow the strength of the June employment report, are definitely less dovish than they were in the June FOMC, which followed the dismal results of the May employment report. Policy makers did vote to keep their target rate between 0.25 and 0.50 percent but, unlike the June meeting, the vote was not unanimous, at 9 to 1 as Kansas City's George voted to raise the funds rate, like she had earlier in the year.

The statement now describes the labor market as having "strengthened", a reflection of the 287,000 June surge in nonfarm payrolls and it describes household spending as "growing strongly." Another hawkish element perhaps is that Brexit isn't mentioned though the statement did repeat that global developments are being monitored.

There are dovish assessments including for business investment which once again is described as soft and also on the outlook for rates which policy makers, as in the past, say will remain low for some time.

But this statement is more hawkish than dovish, keeping the chances open for a rate hike at the September FOMC, provided that job growth and consumer spending hold their current form. Early market reaction is limited with demand for Treasuries rising slightly and demand for stocks, after an initial spike, easing back.

Consensus Outlook
The Federal funds rate target is firmly expected to remain unchanged at a midpoint of 0.375 percent between a range 0.25 to 0.50 percent, where they were set at the December FOMC and have yet to move. Economic data have been strengthening, especially employment and retail sales, but global risks, centered in Brexit, have firmed expectations that the Fed will not act at this meeting. The September meeting, however, is an open question, especially should the Brexit impact on the U.S. prove limited and the economy continues to build steam.

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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