Federal Reserve System (FED) FOMC Meeting summary

Economic outlook and recent developments

• Economic activity continues to expand at a solid pace, with Q3 GDP rising 2.8% and consumer spending remaining resilient, while labor market conditions have eased but unemployment remains low.

• Inflation has eased significantly, with total PCE prices up 2.1% year-over-year and core PCE at 2.7%, though it remains somewhat elevated.

• Supply conditions have improved, supporting economic performance, but housing sector activity remains weak.

• Risks to employment and inflation goals are roughly balanced, though the outlook remains uncertain.

Monetary policy actions and guidance

• The FOMC lowered the Federal Funds Rate by 25 basis points to a range of 4.5%-4.75%, with unanimous approval from the Board.

• Interest rate paid on reserve balances reduced to 4.65%, effective November 8, 2024.

• Primary credit rate decreased by 0.25% to 4.75%.

• The Committee continues to reduce securities holdings and is moving toward a more neutral policy stance.

• Open market operations will maintain the new target range, with specific limits and rates for repo and reverse repo operations.

Balance sheet and operational measures

• Continued reduction of Treasury securities and agency debt/MBS holdings, with monthly caps for rollovers and reinvestments.

• Reinvestment of principal payments from agency debt and MBS above $35 billion per month into Treasury securities.

• Operational flexibility allowed for modest deviations in reinvestments and settlement facilitation.