3 Market Update – Economy, Federal Reserve & Bond Market At its most recent meeting the Fed maintained the target federal funds rate at 3.5% to 3.75%, noting that job gains are keeping pace with the workforce while unemployment is little changed. Recognizing that its preferred measure of inflation, Core PCE, is elevated, the Committee stated it “will deliver price stability”. Core Personal Consumption Expenditures Index – measures the prices paid by consumers for goods & services without the volatility caused by movements in food & energy prices to reveal underlying inflation trends.
Core PCE Index (yoy %)
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Federal Reserve: At its most recent meeting, the Fed recognized the economy “. . . is been expanding at a solid pace . . .” citing strong growth in productivity and capital investment. Likely most noteworthy was that three members of the Committee dissented, favoring an increase of 25 basis points in the policy rate.
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