[Washington, 4th Reuters]-Overall economic activity fell slightly in the first quarter, but household spending and corporate capital investment remained strong. Employment growth has been solid in recent months and the unemployment rate has fallen sharply. Inflation remains high, reflecting pandemic-related imbalances in supply and demand, rising energy prices and broader price pressures.
Russia’s invasion of Ukraine has caused enormous human and financial difficulties. The impact on the US economy is very uncertain. Events associated with the invasion are creating additional upside pressure on inflation, which can weigh on economic activity. In addition, a lockdown related to the new coronavirus in China could exacerbate supply chain disruptions. The Commission is very close to the risk of inflation.
The Commission aims to maximize employment and achieve a long-term inflation rate of 2%. With proper tightening of monetary policy stance, the Commission expects inflation to return to its 2% target and the labor market to remain strong. To support these goals, the Commission has decided to raise the federal funds rate target guidance range to 0.75-1.00%, and expects a continuous increase in the target guidance range to be appropriate. do. In addition, the Commission will begin reducing its holdings of US Treasuries and agency loan-backed securities on June 1, as explained in the Federal Reserve’s Balance Sheet Scale Reduction Plan, which was released in conjunction with this statement. I decided.
In assessing the adequacy of monetary policy, the Commission will continue to monitor the implications of future economic outlook information. If there are risks that could prevent the Commission from achieving its goals, the Commission is prepared to properly adjust its monetary policy stance. The Commission’s assessment considers a wide range of information, including public health-related information, labor market conditions, inflationary pressures, inflation expectations, financial and global trends.
In the policy-making vote, Jerome Powell, Vice-Chairman John Williams, Michelle Bowman, Lael Brainard, James Bullard, Esther George, Patrick Harker, Loretta Mester and Christopher Each member of Waller. Commissioner Harker voted as an alternative member at this meeting.