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NAFCU economist: December FOMC minutes indicate stable rates, moderate growth in 2020
Members of the Federal Open Market Committee (FOMC) – the Federal Reserve's monetary policy-setting arm – agreed that the labor market had remained strong since November, with economic activity sustaining moderate growth, according to minutes from the committee's December meeting released Friday.
"The FOMC minutes reflect a committee that is relatively satisfied with its current policy stance,” said NAFCU Chief Economist and Vice President of Research Curt Long. "There were no dissents in December as the committee maintained rates at their present level, and there appears to be a high hurdle to moving rates, whether up or down. Geopolitical risks represent the biggest threat to the broader economy and to NAFCU’s expectation for relatively stable rates in 2020."
At the conclusion of the December meeting, the committee left the federal funds target rate at a range of 1.5 percent to 1.75 percent, following three rate cuts - totaling 75 basis points - in 2019.
Other items of note in the minutes, released Friday, include:
- global developments, related to both persistent uncertainty regarding international trade and weakness in economic growth abroad, continued to pose some risks to the outlook;
- conditions in the labor market remained strong, with the unemployment rate at a 50-year low, job gains remaining solid, and some measures of labor force participation increasing further; and
- trade developments and concerns about the global economic growth outlook are expected to continue to dampen business investment and exports.
The FOMC will next meet Jan. 28-29 for its first meeting of the new year; its tentative meeting schedule for 2020 can be viewed here.