On December 11, 2019, the Federal Reserve Open Market Committee issued its December statement which left short-term interest rates unchanged. The current rate for federal funds is a range of 1.5% to 1.75%. The formal press release suggests that the Fed is likely to leave rates unchanged over the next several months. The Fed is sensitive to the Core Inflation Rate (excludes food and energy) which remains at a level below the 2% guideline. The Core CPI data released today show a year-over-year rate of 2.3%, however, so the market may need to be prepared for Fed action to increase rates in the first half of 2020.
In its forecast for next year, the Fed expects GDP growth of 2.0%, equal to the rate for the 2019 year. Core inflation is expected to be 2.0%, up from 1.9% in 2019.