Fed holds rates to start year

The Federal Open Market Committee (FOMC), at the close of its first policy-setting meeting of 2020, maintained rates at the current range of 1.5 percent to 1.75 percent. NAFCU Chief Economist and Vice President of Research Curt Long said the association doesn’t expect any rate changes “for at least the first half of the year.”

“As expected, the FOMC left rates unchanged for their second consecutive meeting, following three consecutive rate cuts prior to that,” Long said. “The Committee’s statement was largely unchanged from the prior version, and no Committee members dissented.

“In his press conference, Chairman [Jerome] Powell indicated that the Committee is watching developments related to the spread of the coronavirus for its potential impact on the U.S. economy, but that it is too early to guess what that might be,” he added.

While the committee noted solid jobs gains and low unemployment, one concerning factor was inflation running below 2 percent. However, they determined that “the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation returning to the Committee’s symmetric 2 percent objective.”


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