The Federal Open Market Committee (FOMC) hinted to raise the federal funds rate (FFR) twice in this year. In the latest meeting the board agreed to raised the FFR by a quarter point from 2.25 to 2.50%, hiked it the fourth increase in the year and the ninth since policy normalization began in December 2015.
The board also approved a 0.25 percentage point increase in the primary credit rate to 3.00%. In the Dec. 20, 2018, the Fed to undertake open market operations as necessary to maintain the federal funds rate in a target range of 2.25 to 2.50%.
Its include overnight reverse repurchase operations with maturities of more than one day when necessary to accommodate weekend, holiday, or similar trading conventions at an offering rate of 2.25%. Such operations and by a per-counter party limit of US$30 billion per day.
FOMC indicates that the labor market has continued to strengthen and that economic activity has been rising at a strong rate in November 2018. Job gains have been strong, on average, in recent months, and the unemployment rate has remained low.
So far, household spending has continued to grow strongly, while growth of business fixed investment has moderated from its rapid pace earlier in the year. On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2%. Indicators of longer-term inflation expectations are little changed.