Following the third rate cut in 2019, the Federal Reserve issued this short FOMC Statement.

Information received since the Federal Open Market Committee met in September indicates that the labor market remains strong and that economic activity has been rising at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low. Although household spending has been rising at a strong pace, business fixed investment and exports remain weak. On a 12-month basis, overall inflation and inflation for items other than food and energy are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. In light of the implications of global developments for the economic outlook as well as muted inflation pressures, the Committee decided to lower the target range for the federal funds rate to 1-1/2 to 1-3/4 percent. This action supports the Committee's view that sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective are the most likely outcomes, but uncertainties about this outlook remain. The Committee will continue to monitor the implications of incoming information for the economic outlook as it assesses the appropriate path of the target range for the federal funds rate.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

Dissents

Esther George and Eric Rosengren dissented. Both preferred to maintain the current target range of 1-3/4 percent to 2 percent.

Statement Tracker

The Wall Street Journal Statement Tracker shows a plethora of changes primarily because there was no discussion of repos as in the previous statement.

Hints of a Pause

RECOMMENDED ARTICLES

The WSJ notes Officials removed language used in June, July and September in which the rate-setting committee said it would "act as appropriate" to sustain the economic expansion. They replaced that phrase with a milder alternative. "The committee will continue to monitor the implications of incoming information for the economic outlook as it assesses the appropriate path" of its target rate.

The WSJ took this to as Hints of Pause as the Fed thinks it is done cutting rates in 2019.

CME Fedwatch Odds

Image placeholder title

For now, the market believes the Fed will not cut again this year.

Current odds are 20.1% of one further cut and 0.8% of a 50 basis point cut.

Earlier today, the BEA reported 3rd-Quarter Real GDP Rises 1.9%. That was near the top of the Econoday consensus range.

Consumer spending was strong.

Weak consumer spending would change those December rate cut odds in a hurry.

Mike "Mish" Shedlock

Fed Makes Surprise Inter-Meeting 50 Basis Point Rate Cut

Fed lowers federal-funds rate range to 1% to 1.25% in its first between-meeting move since the financial crisis.

Fed Cuts Rates 1/4 Percent, Three Dissents: Dot Plot Suggests No More 2019 Cuts

The Fed cut interest rates 25 basis point to a target of 1.75% to 2.00%. There were three dissents.

2019 Rate "Cuts" in Play

The market still expects the Fed to hike on Wednesday, but even the 3-Month yield is lower. Let's look ahead to 2019.

Fed Hikes With One Dissent: Fed Behind the Curve?

As expected, the Fed hiked interest rates 25 basis points to a range of 3/4 to 1 percent.

Fed Eyes Long Pause, No Rate Hikes in 2020

The Fed held rates steady today citing low inflation. Members expect a long pause.

Huge Interest Rate Dislocations: Did the Fed Cut Too Much?

A series of charts shows new fed-sponsored interest rate dislocations. Let's dive into the charts.

Fed's 2019 Interest Rate Expectations vs Market's Expectations

The Fed's view of where interest rates are headed in 2019 are quite different from market expectations.

Currency Wars: ECB Hints at Rate Cuts, Trump Slams Draghi in Tweetstorm

President Trump pointed the finger at ECB president Mario Draghi in a Tweetstorm blast.

FOMC Holds Rates, Mush “Transitory” Statement Follows: Interesting Bond Reaction

As universally expected, the Fed did not hike rates at the May meeting. Instead, the FOMC committee issued a boilerplate Press Release that the first quarter slowdown is transitory and that inflation expectations are balanced.