Moderation Is The Statement Refrain From FMOC

Three rate hikes, one down and two to go, are still the FOMC's call for 2018. The FOMC did raise its federal funds target rate by 25 basis points as expected, to a midpoint of 1.625 percent within a range of 1.50 to 1.75 percent, but FOMC forecasts still have 2.1 percent as the median projection for the end of the year.

"Moderation" is the statement's refrain with descriptions of the economy generally moved down from the "solid" category of the prior FOMC statement in January. The labor market is still described as strong but not economic activity which is now "moderate", with both household spending and business fixed investments also downgraded to having "moderated".

The description for inflation is unchanged, that the 12-month rate is expected to "move up" in coming months and to stabilize around the committee's 2 percent goal over the medium term. The statement also repeats that near-term risks to the economic outlook "appear roughly balanced".

Though the rate outlook for this year is unchanged, FOMC projections do see one more rate hike in 2019, at 2.9 vs 2.7 percent in December's quarterly projections, and at 3.4 vs 3.1 percent for 2020. And the projection for this year's GDP is upgraded 2 tenths to a median 2.7 percent with projections for core inflation, though holding unchanged at 1.9 percent for this year, raised 1 tenth to 2.1 percent for both 2019 and 2020.

Today's results suggest that policy makers do not see a risk of falling behind the inflation curve and are content to wait for the economy to accelerate through the year. At 8 to 0, the vote for today's results was once again unanimous.