Federal Reserve System (FED) FOMC Meeting summary

Economic outlook and inflation

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

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

• 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; longer-term expectations are well anchored.

• The labor market is broadly in balance and not a significant source of inflationary pressure.

Monetary policy stance and decisions

• The policy interest rate remains unchanged at 4.25%-4.5%, with the Committee continuing to reduce securities holdings.

• Interest rate paid on reserve balances held at 4.4% as of January 30, 2025; primary credit rate remains at 4.5%.

• Policy stance is now meaningfully less restrictive after a 100 basis point reduction over three meetings.

• No preset course for future rate adjustments; decisions will depend on incoming data and evolving risks.

• 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.