Release Date: May 18, 2016
Minutes of the Federal Open Market Committee, April 26-27, 2016
FOMC minutes can be viewed on the Board’s website at
Staff Economic Outlook
In the U.S. economic forecast prepared by the staff for the April FOMC meeting, real GDP growth in the first quarter of this year was estimated to have been much slower than in the forecast prepared for the March meeting, although projected real GDP growth in the second quarter was revised up a little.
Beyond the near term, real GDP was expected to increase slightly faster than in the previous forecast, largely reflecting a somewhat higher projected trajectory for equity prices and lower assumed paths for both longer-term interest rates and the foreign exchange value of the dollar. The staff continued to project that real GDP would expand at a modestly faster pace than potential output in 2016 through 2018, supported primarily by increases in consumer spending.
The unemployment rate was expected to gradually decline further and to run somewhat below the staff’s estimate of its longer-run natural rate over this period. The staff’s forecast for inflation was little changed from the previous projection. The staff continued to project that inflation would increase over the next several years, as energy prices and the prices of non-energy imports were expected to begin steadily rising this year, but inflation was still projected to be slightly below the Committee’s longer-run objective of 2 percent in 2018.
The staff viewed the uncertainty around its April projections for real GDP growth, the unemployment rate, and inflation as similar to the average of the past 20 years. The risks to the forecast for real GDP were seen as tilted to the downside, reflecting the staff’s assessment that neither monetary nor fiscal policy was well positioned to help the economy withstand substantial adverse shocks. In addition, while there had been recent improvements in global financial and economic conditions, downside risks to the forecast from developments abroad, though smaller, remained.
Consistent with the downside risk to aggregate demand, the staff viewed the risks to its outlook for the unemployment rate as skewed to the upside. The risks to the projection for inflation were still judged as weighted to the downside, reflecting the possibility that longer-term inflation expectations may have edged down.
The Federal Reserve Board and the Federal Open Market Committee on Wednesday released the attached minutes of the Committee meeting held on April 26-27, 2016.
The minutes for each regularly scheduled meeting of the Committee ordinarily are made available three weeks after the day of the policy decision and subsequently are published in the Board’s Annual Report. The descriptions of economic and financial conditions contained in these minutes are based solely on the information that was available to the Committee at the time of the meeting.
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