FOMC Statement: December 16th – 17th

Members’ Stance on Policy Normalization Unchanged Despite Low Inflation. FOMC replaced “considerable time” language with “patient” while Yellen stated that normalization is unlikely to begin “for at least the next couple of meetings”. Yellen clarified that direct pickup in headline inflation is not expected as part of the data-dependent environment of the lift-off. Federal funds rate projections tighten in 2015 but disperse in 2016 and 2017 as members views diverge on the speed of the policy rate increase. Changes to the forward guidance language left both doves and hawks unhappy with three members to dissent

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