Federal Reserve System (FED) FOMC Meeting summary

Economic outlook and labor market conditions

• Economic activity continues to expand at a solid pace, with 2024 GDP growth above 2% and a stable, low unemployment rate.

• Labor market conditions remain solid, with payroll job gains averaging 170,000 per month and unemployment stable at 4.1%.

• Nominal wage growth is easing, and the jobs-to-workers gap is narrowing.

• Inflation has eased significantly, with total PCE prices up 2.6% and core PCE up 2.8% over the past year, though inflation remains somewhat elevated.

• Lower-income households remain under pressure from elevated price levels.

Monetary policy stance and decisions

• The federal funds rate target range is maintained at 4.25%-4.5%, with no preset course for future adjustments.

• Interest rate paid on reserve balances is held at 4.4% effective January 30, 2025.

• Primary credit rate remains at 4.5%.

• Policy is now less restrictive after a 100 basis point reduction, but further changes will depend on incoming data and the evolving economic outlook.

• All policy actions were unanimously approved by the Board of Governors and FOMC members.

Policy implementation and operations

• Open market operations will maintain the federal funds rate within the target range.

• Overnight repo operations set with a minimum bid rate of 4.5% and a $500 billion limit.

• Reverse repo operations offered at 4.25% with a $160 billion per counterparty daily limit.

• Treasury and agency MBS principal payments above monthly caps will be reinvested or rolled over.

• The balance sheet runoff continues, with reserves still abundant and no immediate plans to change the timeline.