The September FOMC meeting ended with no action. For those hoping for some activity after some hawkish Fedspeak, this proved again to be a disappointment, but was not really a surprise for most. Three members did dissent on this lack of action—wanting a rate hike now—and the statement alluded to a rate hike being likely in the near future, after ‘further evidence of continued progress towards its objectives’. Risks were described as being roughly balanced, with overall growth picking up somewhat from earlier in the year, strong labor and household spending, but weaker business investment (more on these below).
Once a quarter, including for this meeting, released materials included additional projections for economic growth and inflation, as well as the ‘dot plot’, a graph introduced in 2012 as a way of showing anonymous FOMC member interest rate projections for the coming year and beyond. These projections have been inconsistent, as growth, inflation and rates have all fallen short of expectations. Actually, there’s been some call for the Fed to drop the dot plot, since these haven’t been very accurate, and the constant tweaks seem to be creating more confusion than they’re alleviating. Continue reading