2017 Economic Calendar
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FOMC Meeting Announcement  
Released On 6/14/2017 2:00:00 PM
PriorConsensusConsensus RangeActual
Federal Funds Rate - Target Level0.75 to 1.00 %1.125 %1.00 % to 1.25 %1.00 to 1.25 %

As expected, the FOMC raised its overnight rate target by one notch, up 25 basis points to a range between 1.00 and 1.25 percent. The Fed said the labor market has continued to strengthen and that business spending has continued to expand. It also said household spending has picked up in recent months, apparently referring to a 0.4 percent rise in April consumer spending and with no mention of this morning's 0.3 percent decline in retail sales for May. There is a crack in the official outlook and that's inflation which it concedes "has declined recently" and which it is "monitoring closely".

Quarterly FOMC forecasts for the funds target are unchanged in 2017-18 but four members now see four hikes this year which is one fewer that the last set of projections in March. The median for this year's funds target remains at 1.4 percent, meaning only one more rate hike this year is the call, with next year's median holding at three hikes. PCE inflation has been downgraded, to 1.6 percent this year which is 3 tenths below the March forecast but is unchanged the next two years at 2.0 percent. The core PCE is seen at 1.7 percent this year, down 2 tenths from March, then holding at 2.0 percent in both 2018 and 2019. GDP forecasts inched up 1 tenth for the median to 2.2 percent this year with no changes to 2018-2019, at 2.1 and 1.9 percent respectively. Unemployment rate forecasts, in another indication of expected labor strength, moved noticeably lower, down 2 tenths this year to 4.3 percent and down 3 tenths for the next two years to 4.2 percent.

The FOMC expects to begin unwinding its $4.5 trillion balance sheet this year, provided however that the economy continues to expand as it expects. Its initial reinvestment limits will start at $6 billion per month for Treasuries and $4 billion per month for mortgage-backed securities, rising each quarter until the caps reach $30 billion per month for Treasuries and $20 billion for mortgage-backed securities.

Initial reaction to the results is limited with the Dow inching higher and with Treasury yields moving up several basis points. These results are no surprise but the risk to the outlook for Fed policy has shifted lower in line with the slowdown for inflation.

Consensus Outlook
The Federal Open Market Committee is expected to raise their federal funds target by 25 basis points to a 1.00 to 1.25 percent range with a 1.125 percent midpoint. The hike is expected to come despite a steady run of both soft consumer spending data and soft inflation data which will likely force the FOMC to repeat their prior language at the May meeting that ongoing weakness is only "transitory". The unwinding of the Fed's balance sheet is expected to begin at year end and additional specifics on the program are expected. This meeting will also include quarterly FOMC forecasts, where downgrades to growth and inflation are possible, and also Janet Yellen's quarterly press conference. Prospects of rising government stimulus have yet to affect policy as FOMC members wait for developments to take shape in Washington.

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
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

2017 Release Schedule
Released On: 2/13/155/36/147/269/2011/112/13

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