Federal Reserve System (FED) FOMC Meeting summary

Policy decision

• Federal funds target range held at 3.75%–4%; ample-reserves policy continued. Vote: 10–2.

• Lisa D. Cook and Beth M. Hammack dissented, preferring a 25-bps rate increase.

• Officials said recent policy actions were beginning to work, but they had reached no firm conclusion on the appropriate policy path; further information will guide a timely return to 2% inflation.

Economic conditions

• H1 GDP growth was revised up to 2.4% from 1.8%; Q3 growth appeared faster, with consumer spending likely above 3% and business investment rising at a double-digit pace.

• Capital expenditures reached a historically high share of GDP, with investment strength broadening beyond high-tech categories.

• Economic activity and domestic spending were strong; productivity growth and capital investment were robust, despite elevated uncertainty partly tied to geopolitical developments.

• Job gains kept pace with workforce growth, unemployment changed little, and claims remained near generational lows; the jobless rate was lower than a year earlier.

Inflation and financial conditions

• Inflation remained elevated after running above the 2% PCE objective for close to six years; officials said there was no soft or implicit target.

• Energy prices rose amid geopolitical developments; officials aim to prevent sector-specific price moves from broadening and keep inflation expectations anchored.

• Financial and credit conditions tightened for some households and businesses, and capital allocation became more discerning; overall conditions were tighter but not judged tight.

• Inflation expectations and market-based inflation compensation moved in the right direction, while near-term household expectations reflected higher prices such as gasoline.