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 %

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.

The Federal Open Market Committee (FOMC) is the policy-making arm of the Federal Reserve. It determines short-term interest rates in the U.S. when it decides the overnight rate that banks pay each other for borrowing reserves when a bank has a shortfall in required reserves. This rate is the fed funds rate. The FOMC also determines whether the Fed should add or subtract liquidity in credit markets separately from that related to changes in the fed funds rate. The Fed announces its policy decision (typically whether to change the fed funds target rate) at the end of each FOMC meeting. This is the FOMC announcement. The announcement also includes brief comments on the FOMC's views on the economy and how many FOMC members voted for and how many voted against the policy decision. Since the last recession, the statement also includes information on Fed purchases of assets, so-called "quantitative easing", which affects longer-term interest rates. Also, a key part of the announcement is guidance on potential changes in policy rates or asset purchases.  Why Investors Care
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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