Federal Reserve FOMC Held Policy Constant, and Bankers See Calm Ahead

The Federal Reserve FOMC Statement holds both parts of their policy are held steady: “In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 5–1/4 to 5–1/2 percent…In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities.”

What we see is the range of 19 central bankers have narrowed their range of where the economy is heading, in individual, independent forecasts. ​

• The economy will grow, after inflation, by 2%
• The unemployment rate will stay at 4%
• PCE and Core PCE inflation will be between 2.5% and 3% this year, falling to 2.0% to 2.5% in 2025, and falling to 2.0% to 2.5% in 2026.

PCE inflation and Core PCE inflation is the price change of goods and services that people actually buy, as opposed to a more holistic passive index (CPI).

For example, we have seen ToughBuilt Industries products available for sale at Lowe’s, Menards and other global retailers for lower prices than we did a year ago. We think the push to drive price increases in consumer goods may be weakening.