BOSTON, MA, July 31, 2024 — The Federal Open Market Committee (FOMC) met today to assess the state of the U.S. economy and monetary policy.

What We Learned
At the fifth of its eight meetings this year, the FOMC left the Federal Funds Target Rate unchanged at 5.25-5.50%, in line with market expectations. Inflation and employment data are inching closer to balance, and we view the developments as signals of a continued softening of the U.S. economy. The data appears consistent with a modest slowdown without elevated risk of a near-term recession, but it warrants consideration for reducing monetary constraint through lower rates or a slower pace of balance sheet reduction during the second half of 2024. The Fed remains committed to its meeting-to-meeting, data-dependent posture. While the direction of the data is promising, confidence in that direction is not at the level required to act today. This posture may shift soon.

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