FOMC Leaves Rates Unchanged

Gary Pzegeo, CFA
December 11, 2019

The FOMC left rates unchanged during their December meeting, while making alterations to items identified for monitoring.

As expected, the FOMC left their benchmark overnight rate unchanged at 1.50% - 1.75%, reiterating that “the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective.”

The statement’s description of the economy was unchanged from the prior meeting. The committee described a strong labor market, rising economic activity, solid job gains and low unemployment. The committee also pointed out that household spending has been strong while business fixed investment and exports remain weak.

The only changes to the statement related to their outlook, omitting the phrase “uncertainties about this outlook remains” while adding “global developments and muted inflation pressures” to items the committee will be monitoring as it assesses the appropriate path for the target range for the funds rate.

Treasuries were little changed. The yield on the benchmark 10-year Treasury note was around 1.81% prior to the release and dropped 1-2 basis points during the post meeting press conference, while equities were flat and moved up modestly into the close. The Summary of Economic Projections (SEP) and accompanying DOT Plot were little changed with the expectation the Fed will be on hold through 2020. 

Retirement Audit Paperwork
Economic projections of Federal Reserve Board members and Federal Reserve Bank presidents, under their individual assumption of projected monetary policy, December 2019. Source: Federal Reserve.

View the full FOMC projections

1. For each period, the median is the middle projection when the projections are arranged from lowest to highest. When the number of projections is even, the median is the average of the two middle projections
2. The central tendency excludes the three highest and three lowest projections for each variable in each year.
3. The range for a variable in a given year includes all participants' projections, from lowest to highest, for that variable in that year.