Differences Between the June 2016 FOMC Statement and the June 2015 FOMC Statement

Information received since the Federal Open Market Committee met in April suggestsindicates that the pace of improvement in the labor market has slowed while growth in economic activity has been expanding moderately after having changed little during the first quarter. The pace of job gains appears to have picked up while. Although the unemployment rate remained steady. On balance, a range of labor market indicators suggests that underutilization of labor resources has declined, job gains have diminished somewhat. Growth in household spending has been moderate and the strengthened. Since the beginning of the year, the housing sector has shown some improvement; however,continued to improve and the drag from net exports appears to have lessened, but business fixed investment and net exports stayed has been soft. Inflation has continued to run below the Committee's 2 percent longer-run objective, partly reflecting earlier declines in energy prices and decreasingin prices of non-energy imports; energy prices appear to have stabilized.. Market-based measures of inflation compensation remain low;declined; most survey-based measures of longer-term inflation expectations have remained stableare little changed, on balance, in recent months.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee currently expects that, with appropriategradual adjustments in the stance of monetary policy accommodation, economic activity will expand at a moderate pace, with and labor market indicators continuing to move toward levels the Committee judges consistent with its dual mandate. The Committee continues to see the risks to the outlook for economic activity and the labor market as nearly balanced.will strengthen. Inflation is anticipatedexpected to remain near its recent low level in the near term, in part because of earlier declines in energy prices, but the Committee expects inflation to rise gradually towardto 2 percent over the medium term as the labor market improves further and the transitory effects of earlierpast declines in energy and import prices dissipate. and the labor market strengthens further. The Committee continues to closely monitor inflation indicators and global economic and financial developments closely.

To support continued progress toward maximum employment and price stabilityAgainst this backdrop, the Committee today reaffirmed its view that the current 0 to 1/4 percentdecided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent. The stance of monetary policy remains appropriate. accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation.

In determining how long to maintain this the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess progress--both realized and expected--toward economic conditions relative to its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium termIn light of the current shortfall of inflation from 2 percent, the Committee will carefully monitor actual and expected progress toward its inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction., and it anticipates doing so until normalization of the level of the federal funds rate is well under way. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.

When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.

Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Charles L. EvansJames Bullard; Stanley Fischer; Jeffrey M. Lacker; Dennis P. LockhartEsther L. George; Loretta J. Mester; Jerome H. Powell; Eric Rosengren; and Daniel K. Tarullo; and John C. Williams.

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