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For release at 2 p.m. EDT

September 18, 2019

Information received since the Federal Open Market Committee met in July indicates that
the labor market remains strong and that economic activity has been rising at a moderate rate.
Job gains have been solid, on average, in recent months, and the unemployment rate has
remained low. Although household spending has been rising at a strong pace, business fixed
investment and exports have weakened. On a 12-month basis, overall inflation and inflation for
items other than food and energy are running below 2 percent. Market-based measures of
inflation compensation remain low; survey-based measures of longer-term inflation expectations
are little changed.
Consistent with its statutory mandate, the Committee seeks to foster maximum
employment and price stability. In light of the implications of global developments for the
economic outlook as well as muted inflation pressures, the Committee decided to lower the
target range for the federal funds rate to 1-3/4 to 2 percent. This action supports the Committee’s
view that sustained expansion of economic activity, strong labor market conditions, and inflation
near the Committee’s symmetric 2 percent objective are the most likely outcomes, but
uncertainties about this outlook remain. As the Committee contemplates the future path of the
target range for the federal funds rate, it will continue to monitor the implications of incoming
information for the economic outlook and will act as appropriate to sustain the expansion, with a
strong labor market and inflation near its symmetric 2 percent objective.
In determining the timing and size of future adjustments to the target range for the federal
funds rate, the Committee will assess realized and expected economic conditions relative to its
maximum employment objective and its symmetric 2 percent inflation objective. This
assessment will take into account a wide range of information, including measures of labor
market conditions, indicators of inflation pressures and inflation expectations, and readings on
financial and international developments.
(more)

For release at 2 p.m. EDT

September 18, 2019

-2Voting for the monetary policy action were Jerome H. Powell, Chair, John C. Williams,
Vice Chair; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Charles L. Evans; and
Randal K. Quarles. Voting against the action were James Bullard, who preferred at this meeting
to lower the target range for the federal funds rate to 1-1/2 to 1-3/4 percent; and Esther L. George
and Eric S. Rosengren, who preferred to maintain the target range at 2 percent to 2-1/4 percent.

-0-

For release at 2 p.m. EDT

September 18, 2019

Decisions Regarding Monetary Policy Implementation
The Federal Reserve has made the following decisions to implement the monetary policy stance
announced by the Federal Open Market Committee in its statement on September 18, 2019:
•

The Board of Governors of the Federal Reserve System voted unanimously to lower
the interest rate paid on required and excess reserve balances to 1.80 percent,
effective September 19, 2019. Setting the interest rate paid on required and excess
reserve balances 20 basis points below the top of the target range for the federal funds
rate is intended to foster trading in the federal funds market at rates well within the
FOMC’s target range.

•

As part of its policy decision, the Federal Open Market Committee voted to authorize
and direct the Open Market Desk at the Federal Reserve Bank of New York, until
instructed otherwise, to execute transactions in the System Open Market Account in
accordance with the following domestic policy directive:
“Effective September 19, 2019, the Federal Open Market Committee directs the
Desk to undertake open market operations as necessary to maintain the federal
funds rate in a target range of 1-3/4 to 2 percent, including overnight reverse
repurchase operations (and 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 1.70 percent, in amounts limited only
by the value of Treasury securities held outright in the System Open Market
Account that are available for such operations and by a per-counterparty limit of
$30 billion per day.
The Committee directs the Desk to continue rolling over at auction all principal
payments from the Federal Reserve’s holdings of Treasury securities and to
continue reinvesting all principal payments from the Federal Reserve’s holdings
of agency debt and agency mortgage-backed securities received during each
calendar month. Principal payments from agency debt and agency mortgagebacked securities up to $20 billion per month will continue to be reinvested in
Treasury securities to roughly match the maturity composition of Treasury
securities outstanding; principal payments in excess of $20 billion per month will
continue to be reinvested in agency mortgage-backed securities. Small deviations
from these amounts for operational reasons are acceptable.
(more)

For release at 2 p.m. EDT

September 18, 2019

-2The Committee also directs the Desk to engage in dollar roll and coupon swap
transactions as necessary to facilitate settlement of the Federal Reserve’s agency
mortgage-backed securities transactions.”
•

In a related action, the Board of Governors of the Federal Reserve System voted
unanimously to approve a 1/4 percentage point decrease in the primary credit rate to
2.50 percent, effective September 19, 2019. In taking this action, the Board approved
requests to establish that rate submitted by the Boards of Directors of the Federal
Reserve Banks of Chicago, Minneapolis, Dallas, and San Francisco.

This information will be updated as appropriate to reflect decisions of the Federal Open Market
Committee or the Board of Governors regarding details of the Federal Reserve’s operational
tools and approach used to implement monetary policy.
More information regarding open market operations and reinvestments may be found on the
Federal Reserve Bank of New York’s website.