Why Read the September 16 FOMC Statement Again

Before the next FOMC statement comes out, it pays to review the previous one. The Warsh Fed's guidance is likely to be thin.

The Federal Open Market Committee approved the following statement for release by a 12 – 0 vote:

The Committee decided to raise the target range for the federal funds rate by 1/4 percentage pointto 3-3/4to 4 percent, in support of the Federal Reserve's dual mandate. The Committee is continuing its policy of maintaining ample reserves in the banking system.

Economic activity is expanding at a solid pace. While uncertainty remains elevated owing, in part, to geopolitical developments,domestic spending has been resilient. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little.

Inflation remains elevated. Today's policy action will support a timelier return to the Committee's 2 percent goal. The Committee will deliver price stability.

Also remember that in July, Hammack, Kashkari and Logan cast the three dissenting votes in the 9-3 decision. Should the FOMC hold rates today, attention will focus on those three officials and possibly others. Markets put just a 7% probability on a surprise hike.