Current indicators suggest that economic activity continues to grow at a solid pace. Employment growth has slowed and the unemployment rate has risen but remains low. Inflation has moved closer to the committee’s 2 percent target but remains somewhat elevated.

The Committee’s long-term objective is to achieve maximum employment and 2 percent inflation. The Committee is now more confident that inflation is moving towards 2 percent on a sustainable basis and considers that the risks to achieving its employment and inflation objectives are roughly balanced. The economic outlook is uncertain and the Committee is mindful of the risks to both sides of its dual mandate.

Given progress on inflation and the balance of risks, the Committee has decided to lower the target range for the federal funds rate by half a percentage point, to 4.3/4 to 5 percent. In considering further adjustments to the target range for the federal funds rate, the Committee will carefully review incoming data, the evolving outlook, and the balance of risks. The Committee will continue to reduce its holdings of Treasury securities, agency debt, and mortgage-backed securities. The Committee is firmly committed to supporting maximum employment and returning inflation to the 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the impact of incoming information on the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could affect the achievement of the Committee’s objectives. The Committee’s assessments will take into account a wide range of information, including information on labour market conditions, inflation pressures and expectations, and financial and international developments.

Voting in favor of the monetary policy measure were Jerome H. Powell, Chairman; John C. Williams, Vice Chairman; Thomas I. Barkin; Michael S. Barr; Raphael W. Bostic; Lisa D. Cook; Mary C. Daly; Beth M. Hammack; Philip N. Jefferson; Adriana D. Kugler and Christopher J. Waller. Voting against the measure was Michelle W. Bowman, who preferred to lower the target range for the federal funds rate by 1/4 percentage point at this meeting.

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Implementation notice dated 18 September 2024