2016 Economic Calendar
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FOMC Meeting Announcement  
Released On 12/14/2016 2:00:00 PM
PriorConsensusConsensus RangeActual
Federal Funds Rate - Target Level0.25 to 0.50 %0.625 %0.50 % to 0.75 %0.50 to 0.75 %

Highlights
As expected, the Federal Reserve has raised its target overnight rate, up 0.25 percent to a range of 0.50 to 0.75 percent. Assessments are roughly the same as the November meeting, with job gains described as "solid", household spending called "moderate", and business investment still "soft".

Inflation is also described as mostly soft though inflation compensation gets an upgrade, that is the yield difference between inflation-protected securities and regular securities. The committee still sees the economy expanding at a moderate pace and sees near-term risks as roughly balanced. The vote was unanimous, 10 to zero.

FOMC forecasts show up to three rate hikes are expected for next year, up from two in September in a move described by the Fed as "slight". Inflation forecasts are unchanged but forecasts for the unemployment rate, in a reminder of full employment, have been lowered.

This report has all the markings of an incremental process, that the time for the second rate hike of the cycle had naturally arrived. But the outlook for the economy, due to fiscal stimulus under the incoming administration, has perhaps changed substantially. Fed Chair Yellen's press conference follows.

Consensus Outlook
Forecasters see the FOMC raising the Federal funds rate target range by a 1/4 point to a midpoint of 0.625 percent in what would be only second hike of the cycle. The unemployment rate at 4.6 percent is well within the Fed's long-term range though inflation remains under target, though even here PCE price readings have been edging higher. The Beige Book didn't signal any signs of rising demand though recent economic data, including a post-election surge in consumer confidence, have been showing improvement. The meeting will also include Janet Yellen's quarterly press conference and updates for FOMC forecasts. It is uncertain how much consideration will be given to the outlook for increased fiscal stimulus under the Trump administration.

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
Data Source: Haver Analytics
 

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


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