1

Minutes of the Federal Open Market

Committee
July 30–31, 2024

A joint meeting of the Federal Open Market Committee and the Board of Governors of the Federal
Reserve System was held in the offices of the Board of Governors on Tuesday, July 30, 2024, at
10:00 a.m. and continued on Wednesday, July 31, 2024, at 9:00 a.m.1

Developments in Financial Markets and Open Market Operations

The manager turned first to a review of developments in financial markets. Financial conditions eased
modestly over the intermeeting period, reflecting lower long-term interest rates and higher equity
prices. The manager noted that current financial conditions appeared to be providing neither a
headwind nor tailwind to growth.

Nominal Treasury yields declined over the period, with shorter-term yields having decreased by more
than longer-term yields, leading to a steepening of the yield curve. Treasury yields remained sensitive
to surprises in economic data, particularly consumer price index releases and employment reports.
While near-term inflation compensation fell over the intermeeting period, longer-term forward
measures were little changed. Measures of inflation expectations obtained from term structure
models were modestly lower. The policy rate path derived from futures prices and the modal path
derived from options prices both declined over the intermeeting period and had come into closer
alignment with the median of the modal responses from the Open Market Desk’s Survey of Primary
Dealers and Survey of Market Participants. Policy expectations, however measured, pointed to a first
rate cut at the September FOMC meeting, at least one more cut later in the year, and further policy
easing next year.

In the equity markets, the high perceived likelihood of a September cut in the target range for the
policy rate induced a notable appreciation in the stocks of firms with small and medium capitalization,
which tend to be more sensitive to interest rates. Stocks of larger companies, especially those in the
technology sector, underperformed. Second-quarter earnings reports received before the meeting had
been slightly above analysts’ expectations, although some companies noted a softening in consumer
spending.

1The Federal Open Market Committee is referenced as the “FOMC” and the “Committee” in these minutes; the Board of
Governors of the Federal Reserve System is referenced as the “Board” in these minutes.
 2 July 30–31, 2024

Expectations for policy rates in most advanced foreign economies (AFEs) declined, as recent data
generally pointed to continued progress on inflation. Although most AFE central banks had cut their
policy rates or were expected to do so soon, the manager noted that market participants continued to
expect the Bank of Japan to tighten policy this year. The sudden announcement of a French election
contributed to some short-term market volatility early in the intermeeting period, including a widening
between yields of French and German 10-year sovereign bonds and a widening in spreads for off-the-
run U.S. Treasury securities, but the effects on U.S. Treasury markets were short lived.

The effective federal funds rate remained unchanged over the intermeeting period, but the manager
noted that rates on repurchase agreements (repo) had edged higher, reflecting increased demand for
financing Treasury securities as well as the expected effects of gradual balance sheet normalization.
Use of the overnight reverse repo (ON RRP) facility declined slightly over the intermeeting period. The
staff projected that ON RRP usage would decline more noticeably over the remainder of the year,
particularly as issuance of Treasury bills increases. However, the manager noted that it was possible
that idiosyncratic factors specific to some ON RRP participants might support ON RRP balances in the
months ahead. Looking at a range of money market indicators, the manager concluded that reserves
remained abundant but indicated that the staff would continue to closely monitor developments in
money markets. Finally, the manager described a set of technical adjustments to the production of
the Secured Overnight Financing Rate that the Federal Reserve Bank of New York had proposed in a
recent public consultation.

By unanimous vote, the Committee ratified the Desk’s domestic transactions over the intermeeting
period. There were no intervention operations in foreign currencies for the System’s account during
the intermeeting period.

Staff Review of the Economic Situation

The information available at the time of the meeting indicated that U.S. economic activity had
advanced solidly so far this year, but at a markedly slower pace than in the second half of 2023.
Labor market conditions continued to ease: Job gains moderated, and the unemployment rate moved
up further but remained low. Consumer price inflation was well below its year-earlier pace but
remained somewhat elevated.

Consumer price inflation—as measured by the 12-month change in the price index for personal
consumption expenditures (PCE)—was about the same in June as it was at the start of the year, though
the month-over-month changes in May and June were smaller than those seen earlier in the year.
Total PCE price inflation was 2.5 percent in June, and core PCE price inflation—which excludes
changes in energy prices and many consumer food prices—was 2.6 percent.
 Minutes of the Federal Open Market Committee 3

Recent data suggested that labor market conditions had eased further. Average monthly nonfarm
payroll gains in the second quarter were smaller than the average pace seen in the first quarter and
over the previous year. The unemployment rate moved up further in June to 4.1 percent; the labor
force participation rate ticked up as well, and the employment-to-population ratio was unchanged.
The unemployment rate for African Americans rose in June, while the rate for Hispanics declined
slightly; both rates were above that for Whites. The ratio of job vacancies to unemployment remained
at 1.2 in June, about the same as its pre-pandemic level. Measures of nominal wages continued to
decelerate: Average hourly earnings for all employees rose 3.9 percent over the 12 months ending in
June, down 0.8 percentage point relative to a year earlier, and the 12-month change in the
employment cost index of hourly compensation of private industry workers was 3.9 percent in June,
down 0.6 percentage point from its year-earlier pace.

According to the advance release, real gross domestic product (GDP) rose solidly in the second quarter
after a modest gain in the first quarter. Over the first half of the year, GDP growth was noticeably
slower than its average pace in 2023. However, real private domestic final purchases (PDFP)—which
comprises PCE and private fixed investment and which often provides a better signal than GDP of
underlying economic momentum—posted a solid second-quarter increase that was in line with its first-
quarter pace and only moderately slower than its average rate of increase in 2023.

As in the first quarter, net exports subtracted from U.S. GDP growth in the second quarter. Growth in
real exports of goods and services remained tepid overall, as gains in exports of capital goods and
consumer goods were partly offset by declines in exports of foods and industrial supplies. By contrast,
real imports continued to rise at a brisk pace, driven by further increases in imports of capital goods.

Foreign economic growth was estimated to have been subdued in the second quarter, held down by a
sharp deceleration in economic activity in China amid ongoing property-sector woes. In Europe and
Latin America, output likely expanded below its trend pace, as restrictive monetary policy continued to
be a drag on activity.

Recent global inflation developments were mixed. In the AFEs, headline inflation edged down in the
second quarter but generally remained above target levels. In emerging market economies, headline
inflation rose a touch overall, reflecting, in part, run-ups in food prices in some countries. The Bank of
Canada and the Swiss National Bank cut their policy rates further, in part citing easing inflation
pressures. The People’s Bank of China also lowered some key policy rates amid ongoing property-
sector woes and weak consumer sentiment.
 4 July 30–31, 2024

Staff Review of the Financial Situation

The market-implied path for the federal funds rate moved down over the intermeeting period. Options
on interest rate futures suggested that market participants were placing higher odds on a larger policy
easing by early 2025 than they did just before the June meeting. Consistent with the downward shift
in the implied policy path, nominal Treasury yields moved down, on net, with the most pronounced
declines at shorter horizons driven largely by decreases in inflation compensation.

Broad stock price indexes rose slightly on net. Yield spreads on investment- and speculative-grade
corporate bonds were little changed and remained at about the lowest decile of their respective
historical distributions. The one-month option-implied volatility on the S&P 500 index rose moderately
and was somewhat elevated by historical standards, suggesting that investors perceived some, but
not outsized, risks to the economic outlook.

Market-based measures of the expected paths of policy rates and sovereign bond yields in most AFEs
fell notably, largely in response to declines in U.S. rates. Following the surprise announcement of
parliamentary elections in France, the spread between yields of French and German 10-year sovereign
bonds widened to its highest level since 2012 but then partially retraced on the outcome of no clear
parliamentary majority. The broad dollar index was little changed over the intermeeting period. On
balance, moves in foreign risky asset prices were mixed and modest.

Overnight secured rates edged up over the intermeeting period, but conditions in U.S. short-term
funding markets remained stable, with typical dynamics observed surrounding quarter-end. Average
usage of the ON RRP facility declined slightly. Banks’ total deposit levels increased modestly, as large
time deposits displayed moderate inflows.

In domestic credit markets, borrowing costs remained elevated over the intermeeting period despite
modest declines in some markets. Rates on 30-year conforming residential mortgages declined, on
net, over the intermeeting period but stayed near recent high levels. Interest rates on new credit card
offers increased slightly, while rates on new auto loans were little changed. Interest rates on small
business loans remained elevated. Yields on an array of fixed-income securities—including
commercial mortgage-backed securities (CMBS), investment- and speculative-grade corporate bonds,
and residential mortgage-backed securities—moved lower to still-elevated levels relative to recent
history. The declines were largely driven by decreases in Treasury yields.

Financing through capital markets and nonbank lenders was readily accessible for public corporations
and large and middle-market private corporations, and credit availability for leveraged loan borrowers
remained solid over the intermeeting period. For smaller firms, however, credit availability remained
moderately tight. In the July Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS),
 Minutes of the Federal Open Market Committee 5

banks reported modestly tighter standards and lending terms for commercial and industrial (C&I)
loans, on net, while reported demand for C&I loans remained about unchanged. Meanwhile, C&I loan
balances increased in the second quarter. Regarding commercial real estate (CRE) loans, banks in
the July SLOOS reported tightening standards for all loan categories. Nonetheless, bank CRE loan
balances increased over the second quarter, albeit at a diminished pace relative to the previous
quarter.

Credit remained available for most consumers over the intermeeting period, though credit growth
showed signs of moderating. Credit card balances slowed in June, and SLOOS respondents indicated
that standards for credit cards tightened moderately in the second quarter. Although banks reported
in the SLOOS that lending standards on auto loans were unchanged in the second quarter, growth in
auto lending at both banks and nonbanks contracted further. In the residential mortgage market,
access to credit was little changed overall and continued to depend on borrowers’ credit risk
attributes.

Credit quality remained solid for large and midsize firms, home mortgage borrowers, and
municipalities but continued to deteriorate in other sectors. The credit quality of nonfinancial firms
borrowing in the corporate bond and leveraged loan markets remained stable. Delinquency rates on
loans to small businesses remained slightly above pre-pandemic levels. Credit quality in the CRE
market deteriorated further, with the average delinquency rate for loans in CMBS and the share of
nonperforming CRE loans at banks both rising further. Regarding household balance sheets,
delinquency rates on most residential mortgages remained near pre-pandemic lows. Though
consumer delinquency rates had increased, particularly among nonprime borrowers, the rise in
delinquency rates for both credit cards and auto loans slowed in the second quarter.

The staff provided an update on its assessment of the stability of the U.S. financial system and, on
balance, continued to characterize the system’s financial vulnerabilities as notable. The staff judged
that asset valuation pressures remained elevated, with estimates of risk premiums across key
markets low compared with historical standards. House prices remained elevated relative to
fundamentals. CRE prices continued to decline, especially in the multifamily and office sectors, and
vacancy rates in these sectors continued to increase.

Vulnerabilities associated with business and household debt were characterized as moderate.
Nonfinancial business leverage was high, but the ability of public firms to service their debt remained
solid, in large part due to strong earnings. The fraction of private firms with low debt-servicing ability
continued to move up and remained at high levels compared with the past decade. Household
balance sheets remained strong overall, as aggregate home equity stayed quite high and
delinquencies on mortgage loans remained low.
 6 July 30–31, 2024

Leverage in the financial sector was characterized as notable. Regulatory capital ratios in the banking
sector remained high. The fair value of bank assets, however, remained low. For the nonbank sector,
leverage at hedge funds was at its highest recorded level based on data since 2013, partly due to the
prevalence of the cash–futures basis trade. Leverage at life insurers was somewhat elevated, and
their holdings of risky and illiquid securities continued to grow.

Funding risks were also characterized as notable. Assets in prime money market funds and other
runnable cash-management vehicles remained near historical highs. Life insurers’ greater reliance on
nontraditional liabilities, coupled with their increasing holdings of risky corporate debt, suggested that
adverse shocks to the industry could trigger substantial funding pressures at these firms.

Staff Economic Outlook

The economic forecast prepared by the staff for the July meeting implied a lower rate of resource
utilization over the projection period relative to the forecast prepared for the previous meeting. The
staff’s outlook for growth in the second half of 2024 had been marked down largely in response to
weaker-than-expected labor market indicators. As a result, the output gap at the start of 2025 was
somewhat narrower than had been previously projected, although still not fully closed. Over 2025 and
2026, real GDP growth was expected to rise about in line with potential, leaving the output gap roughly
flat in those years. The unemployment rate was expected to edge up slightly over the remainder of
2024 and then to remain roughly unchanged in 2025 and 2026.

The staff’s inflation forecast was slightly lower than the one prepared for the previous meeting,
reflecting incoming data and the lower projected level of resource utilization. Both total and core PCE
price inflation were expected to decline further as demand and supply in product and labor markets
continued to move into better balance; by 2026, total and core inflation were expected to be around
2 percent.

The staff continued to view the uncertainty around the baseline projection as close to the average over
the past 20 years. Risks to the inflation forecast were still seen as tilted to the upside, albeit to a
smaller degree than at the time of the previous meeting. The risks around the forecast for real activity
were viewed as skewed to the downside, both because more-persistent inflation could result in tighter
financial conditions than in the baseline and because the recent softening in some indicators of labor
market conditions might be pointing to a larger-than-anticipated slowdown in aggregate demand
growth.
 Minutes of the Federal Open Market Committee 7

Participants’ Views on Current Conditions and the Economic Outlook

Participants observed that inflation had eased over the past year but remained elevated and that, in
recent months, there had been some further progress toward the Committee’s 2 percent inflation
objective. Participants noted that the recent progress on disinflation was broad based across the
major subcomponents of core inflation. Core goods prices were about flat from March through June
after having risen during the first three months of the year. Price inflation in June for housing services
showed a notable slowing, which participants had been anticipating for some time. In addition, core
nonhousing services prices had decelerated in recent months. Some participants noted that the
recent data corroborated reports from their business contacts that firms’ pricing power was waning, as
consumers appeared to be more sensitive to price increases. Various contacts had also reported that
they had cut prices or were offering discounts to stay competitive, or that declines in input costs had
helped reduce pressure on retail prices.

With regard to the outlook for inflation, participants judged that recent data had increased their
confidence that inflation was moving sustainably toward 2 percent. Almost all participants observed
that the factors that had contributed to recent disinflation would likely continue to put downward
pressure on inflation in coming months. These factors included a continued waning of pricing power,
moderating economic growth, and the runoff in excess household savings accumulated during the
pandemic. Many participants noted that the moderation of growth in labor costs as labor market
conditions rebalanced would continue to contribute to disinflation, particularly in core nonhousing
services prices. Some participants noted that the lags in the time it takes for housing rental
conditions for new tenants to show through to aggregate price data for housing services meant that
the disinflationary trend in this component would likely continue. Participants also observed that
longer-term inflation expectations had remained well anchored and viewed this anchoring as
underpinning the disinflation process. A couple of participants noted that inflation pressures might
persist for some time, as they assessed that the economy had considerable momentum, and that,
even with some easing of the demand for labor, the labor market remained strong.

Participants assessed that supply and demand conditions in the labor market had continued to come
into better balance. The unemployment rate had moved up but remained low, having risen
0.7 percentage point since its trough in April 2023 to 4.1 percent in June. The monthly pace of payroll
job gains had moderated from the first quarter but had been solid in recent months. However, many
participants noted that reported payroll gains might be overstated, and several assessed that payroll
gains may be lower than those needed to keep the unemployment rate constant with a flat labor force
participation rate. Participants observed that other indicators also pointed to easing in labor market
conditions, including a lower hiring rate and a downtrend in job vacancies since the beginning of the
 8 July 30–31, 2024

year. Participants noted that the rebalancing of labor market conditions over the past year was also
aided by an expansion of the supply of workers, reflecting increases in the labor force participation
rate among individuals aged 25 to 54 and a strong pace of immigration. Participants noted that, with
continued rebalancing of labor market conditions, nominal wage growth had continued to moderate.
Many participants cited reports from District contacts that supported the view that labor market
conditions had been easing. In particular, contacts reported that they had been experiencing less
difficulty in hiring and retaining workers and that they saw limited wage pressures. Participants
generally assessed that, overall, conditions in the labor market had returned to about where they
stood on the eve of the pandemic—strong but not overheated.

Regarding the outlook for the labor market, participants discussed various indicators of layoffs,
including initial claims for unemployment benefits and measures of job separations. Some
participants commented that these indicators had remained at levels consistent with a strong labor
market. Participants agreed that these and other indicators of labor market conditions merited close
monitoring. Several participants said that their District contacts reported that they were actively
managing head counts through selective hiring and attrition.

Participants noted that real GDP growth was solid in the first half of the year, though slower than the
robust pace seen in the second half of last year. PDFP growth, which usually gives a better signal than
GDP growth of economic momentum, also moderated in the first half, but by less than GDP growth.
PDFP expanded at a solid pace, supported by growth in consumer spending and business fixed
investment. Participants viewed the moderation in the growth of economic activity to be largely in line
with what they had anticipated.

Regarding the household sector, participants observed that consumer spending had slowed from last
year’s robust pace, consistent with restrictive monetary policy, easing of labor market conditions, and
slowing income growth. They noted, however, that consumer spending had still grown at a solid pace
in the first half of the year, supported by the still-strong labor market and aggregate household
balance sheets. Some participants observed that lower- and moderate-income households were
encountering increasing strains as they attempted to meet higher living costs after having largely run
down savings accumulated during the pandemic. These participants noted that such strains were
evident in indicators such as rising credit card delinquency rates and an increased share of
households paying the minimum due on balances, and warranted continued close monitoring. Several
participants cited reports that consumers, especially those in lower-income households, were shifting
away from discretionary spending and switching to lower-cost food items and brands. A couple of
participants remarked that spending by some higher-income households was likely being bolstered by
wealth effects from equity and housing price appreciation. Participants noted that residential
 Minutes of the Federal Open Market Committee 9

investment was weak in the second quarter, likely reflecting the pickup in mortgage rates from earlier
in the year.

Regarding the business sector, participants noted that conditions varied by firm size, sector, and
region. A couple of participants noted that their District contacts had reported larger firms as having a
generally stable outlook, while the outlook for smaller firms appeared more uncertain. A few
participants said that their contacts reported that conditions in the manufacturing sector were
somewhat weaker, while the professional and business services sector and technology-related sectors
remained strong. A few participants noted that the agricultural sector continued to face strains
stemming from low food commodity prices and high input costs.

Participants discussed the risks and uncertainties around the economic outlook. Upside risks to the
inflation outlook were seen as having diminished, while downside risks to employment were seen as
having increased. Participants saw risks to achieving the inflation and employment objectives as
continuing to move into better balance, with a couple noting that they viewed these risks as more or
less balanced. Some participants noted that as conditions in the labor market have eased, the risk
had increased that continued easing could transition to a more serious deterioration. As sources of
upside risks to inflation, some participants cited the potential for disruptions to supply chains and a
further deterioration in geopolitical conditions. A few participants noted that an easing of financial
conditions could boost economic activity and present an upside risk to economic growth and inflation.

In their discussion of financial stability, participants who commented noted vulnerabilities to the
financial system that they assessed warranted monitoring. Some participants observed that the
banking system was sound but noted risks associated with unrealized losses on securities, reliance on
uninsured deposits, and interconnections with nonbank financial intermediaries. In their discussion of
bank funding, several participants commented that, because the discount window is an important
liquidity backstop, the Federal Reserve should continue to improve the window’s operational efficiency
and to communicate effectively about the window’s value. Participants generally noted that some
banks and nonbank financial institutions likely have vulnerabilities associated with high CRE
exposures through loan portfolios and holdings of CMBS. Most of these participants remarked that
risks related to CRE exposures depend importantly on the property type and the local market
conditions of the properties involved. A couple of participants noted concerns about asset valuation
pressures in other markets as well. Many participants commented on cyber risks that could impair the
operation of financial institutions, financial infrastructure, and, potentially, the overall economy. Many
participants remarked that because a few firms play a substantial role in the provision of information
technology services to the financial sector and because of the highly interconnected nature of some
firms in the financial industry itself, there was an increased risk that significant cyber disruptions at a
small number of key firms could have widespread effects. Several participants noted that leverage in
 10 July 30–31, 2024

the Treasury market remained a risk, that it would be important to monitor developments regarding
Treasury market resilience amid the move to central clearing, or that it is valuable to communicate
about the Federal Reserve’s standing repo facility as a liquidity backstop. A couple of participants
commented on the financial condition of low- and moderate-income households that have exhausted
their savings and the importance of monitoring rising delinquency rates on credit cards and auto
loans.

In their consideration of monetary policy at this meeting, participants observed that recent indicators
suggested that economic activity had continued to expand at a solid pace, job gains had moderated,
and the unemployment rate had moved up but remained low. While inflation remained somewhat
above the Committee’s longer-run goal of 2 percent, participants noted that inflation had eased over
the past year and that recent incoming data indicated some further progress toward the Committee’s
objective. All participants supported maintaining the target range for the federal funds rate at 5¼ to
5½ percent, although several observed that the recent progress on inflation and increases in the
unemployment rate had provided a plausible case for reducing the target range 25 basis points at this
meeting or that they could have supported such a decision. Participants furthermore judged that it
was appropriate to continue the process of reducing the Federal Reserve’s securities holdings.

In discussing the outlook for monetary policy, participants noted that growth in economic activity had
been solid, there had been some further progress on inflation, and conditions in the labor market had
eased. Almost all participants remarked that while the incoming data regarding inflation were
encouraging, additional information was needed to provide greater confidence that inflation was
moving sustainably toward the Committee’s 2 percent objective before it would be appropriate to
lower the target range for the federal funds rate. Nevertheless, participants viewed the incoming data
as enhancing their confidence that inflation was moving toward the Committee’s objective. The vast
majority observed that, if the data continued to come in about as expected, it would likely be
appropriate to ease policy at the next meeting. Many participants commented that monetary policy
continued to be restrictive, although they expressed a range of views about the degree of
restrictiveness, and a few participants noted that ongoing disinflation, with no change in the nominal
target range for the policy rate, by itself results in a tightening in monetary policy. Most participants
remarked on the importance of communicating the Committee’s data-dependent approach and
emphasized, in particular, that monetary policy decisions are conditional on the evolution of the
economy rather than being on a preset path or that those decisions depend on the totality of the
incoming data rather than on any particular data point. Several participants stressed the need to
monitor conditions in money markets and factors affecting the demand for reserves amid the ongoing
reduction in the Federal Reserve’s balance sheet.
 Minutes of the Federal Open Market Committee 11

In discussing risk-management considerations that could bear on the outlook for monetary policy,
participants highlighted uncertainties affecting the outlook, such as those regarding the amount of
restraint currently provided by monetary policy, the lags with which past and current restraint have
affected and will affect economic activity, and the degree of normalization of the economy following
disruptions associated with the pandemic. A majority of participants remarked that the risks to the
employment goal had increased, and many participants noted that the risks to the inflation goal had
decreased. Some participants noted the risk that a further gradual easing in labor market conditions
could transition to a more serious deterioration. Many participants noted that reducing policy restraint
too late or too little could risk unduly weakening economic activity or employment. A couple
participants highlighted in particular the costs and challenges of addressing such a weakening once it
is fully under way. Several participants remarked that reducing policy restraint too soon or too much
could risk a resurgence in aggregate demand and a reversal of the progress on inflation. These
participants pointed to risks related to potential shocks that could put upward pressure on inflation or
the possibility that inflation could prove more persistent than currently expected.

Committee Policy Actions

In their discussions of monetary policy for this meeting, members agreed that economic activity had
continued to expand at a solid pace. Job gains had moderated, and the unemployment rate had
moved up but remained low. Inflation eased over the past year but remained somewhat elevated.
Members concurred that, in recent months, there had been some further progress toward the
Committee’s 2 percent inflation objective. Members judged that the risks to achieving the
Committee’s employment and inflation goals had continued to move into better balance. Members
viewed the economic outlook as uncertain and agreed that they were attentive to the risks to both
sides of the Committee’s dual mandate.

In support of the Committee’s goals to achieve maximum employment and inflation at the rate of
2 percent over the longer run, members agreed to maintain the target range for the federal funds rate
at 5¼ to 5½ percent. Members concurred that, in considering any adjustments to the target range for
the federal funds rate, they would carefully assess incoming data, the evolving outlook, and the
balance of risks. Members agreed that they did not expect that it would be appropriate to reduce the
target range until they had gained greater confidence that inflation is moving sustainably toward
2 percent. In addition, members agreed to continue to reduce the Federal Reserve’s holdings of
Treasury securities and agency debt and agency mortgage‑backed securities. All members affirmed
their strong commitment to returning inflation to the Committee’s 2 percent objective.

Members agreed that, in assessing the appropriate stance of monetary policy, they would continue to
monitor the implications of incoming information for the economic outlook. They would be prepared to
 12 July 30–31, 2024

adjust the stance of monetary policy as appropriate if risks emerged that could impede the attainment
of the Committee’s goals. Members also agreed that their assessments would take into account a
wide range of information, including readings on labor market conditions, inflation pressures and
inflation expectations, and financial and international developments.

Members agreed that to appropriately reflect developments since the previous meeting related to their
maximum-employment objective, they should note in the statement that “job gains have moderated,
and the unemployment rate has moved up but remains low.” Similarly, to appropriately reflect
developments related to their price-stability objective, they agreed to note that “there has been some
further progress toward the Committee’s 2 percent inflation objective.” Members also agreed to
reflect the shifting balance of risks by stating that “the Committee judges that the risks to achieving its
employment and inflation goals continue to move into better balance” and that “the Committee is
attentive to the risks to both sides of its dual mandate.”

At the conclusion of the discussion, the Committee voted to direct the Federal Reserve Bank of New
York, until instructed otherwise, to execute transactions in the System Open Market Account in
accordance with the following domestic policy directive, for release at 2:00 p.m.:

“Effective August 1, 2024, the Federal Open Market Committee directs the Desk to:

• Undertake open market operations as necessary to maintain the federal funds rate in a
target range of 5¼ to 5½ percent.

• Conduct standing overnight repurchase agreement operations with a minimum bid rate of
5.5 percent and with an aggregate operation limit of $500 billion.

• Conduct standing overnight reverse repurchase agreement operations at an offering rate

of 5.3 percent and with a per-counterparty limit of $160 billion per day.

• Roll over at auction the amount of principal payments from the Federal Reserve’s
holdings of Treasury securities maturing in each calendar month that exceeds a cap of
$25 billion per month. Redeem Treasury coupon securities up to this monthly cap and
Treasury bills to the extent that coupon principal payments are less than the monthly cap.

• Reinvest the amount of principal payments from the Federal Reserve’s holdings of
agency debt and agency mortgage-backed securities (MBS) received in each calendar
month that exceeds a cap of $35 billion per month into Treasury securities to roughly
match the maturity composition of Treasury securities outstanding.

• Allow modest deviations from stated amounts for reinvestments, if needed for
operational reasons.
 Minutes of the Federal Open Market Committee 13

• Engage in dollar roll and coupon swap transactions as necessary to facilitate settlement
of the Federal Reserve’s agency MBS transactions.”

The vote also encompassed approval of the statement below for release at 2:00 p.m.:

“Recent indicators suggest that economic activity has continued to expand at a solid pace.
Job gains have moderated, and the unemployment rate has moved up but remains low.
Inflation has eased over the past year but remains somewhat elevated. In recent months,
there has been some further progress toward the Committee’s 2 percent inflation objective.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent
over the longer run. The Committee judges that the risks to achieving its employment and
inflation goals continue to move into better balance. The economic outlook is uncertain, and
the Committee is attentive to the risks to both sides of its dual mandate.

In support of its goals, the Committee decided to maintain the target range for the federal
funds rate at 5¼ to 5½ percent. In considering any adjustments to the target range for the
federal funds rate, the Committee will carefully assess incoming data, the evolving outlook,
and the balance of risks. The Committee does not expect it will be appropriate to reduce the
target range until it has gained greater confidence that inflation is moving sustainably toward
2 percent. In addition, the Committee will continue reducing its holdings of Treasury
securities and agency debt and agency mortgage‑backed securities. The Committee is
strongly committed to returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to
monitor the implications of incoming information for the economic outlook. The Committee
would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that
could impede the attainment of the Committee’s goals. The Committee’s assessments will
take into account a wide range of information, including readings on labor market conditions,
inflation pressures and inflation expectations, and financial and international developments.”

Voting for this action: Jerome H. Powell, John C. Williams, Thomas I. Barkin, Michael S. Barr,
Raphael W. Bostic, Michelle W. Bowman, Lisa D. Cook, Mary C. Daly, Austan D. Goolsbee,
Philip N. Jefferson, Adriana D. Kugler, and Christopher J. Waller.

Voting against this action: None.

Austan D. Goolsbee voted as an alternate member at this meeting.

Consistent with the Committee’s decision to leave the target range for the federal funds rate
unchanged, the Board of Governors of the Federal Reserve System voted unanimously to maintain the
 14 July 30–31, 2024

interest rate paid on reserve balances at 5.4 percent, effective August 1, 2024. The Board of
Governors of the Federal Reserve System voted unanimously to approve the establishment of the
primary credit rate at the existing level of 5.5 percent, effective August 1, 2024.

It was agreed that the next meeting of the Committee would be held on Tuesday–Wednesday,
September 17–18, 2024. The meeting adjourned at 10:10 a.m. on July 31, 2024.

Notation Vote
By notation vote completed on July 2, 2024, the Committee unanimously approved the minutes of the
Committee meeting held on June 11–12, 2024.

Attendance
Jerome H. Powell, Chair
John C. Williams, Vice Chair
Thomas I. Barkin
Michael S. Barr
Raphael W. Bostic
Michelle W. Bowman
Lisa D. Cook
Mary C. Daly
Philip N. Jefferson
Adriana D. Kugler
Christopher J. Waller

Susan M. Collins, Austan D. Goolsbee, Alberto G. Musalem, Jeffrey R. Schmid, and Sushmita Shukla,
Alternate Members of the Committee
Patrick Harker, Neel Kashkari, and Lorie K. Logan, Presidents of the Federal Reserve Banks of
Philadelphia, Minneapolis, and Dallas, respectively
Mark Meder, Interim President of the Federal Reserve Bank of Cleveland
Joshua Gallin, Secretary
Matthew M. Luecke, Deputy Secretary
Brian J. Bonis, Assistant Secretary
Michelle A. Smith, Assistant Secretary
Mark E. Van Der Weide, General Counsel
Richard Ostrander, Deputy General Counsel
Trevor A. Reeve, Economist
Stacey Tevlin, Economist
Beth Anne Wilson, Economist
Edward S. Knotek II, David E. Lebow, and William Wascher, Associate Economists
Roberto Perli, Manager, System Open Market Account
Julie Ann Remache, Deputy Manager, System Open Market Account
Stephanie R. Aaronson, Senior Associate Director, Division of Research and Statistics, Board
Jose Acosta, Senior System Administrator II, Division of Information Technology, Board
 Minutes of the Federal Open Market Committee 15

Alyssa G. Anderson, Principal Economist, Division of Monetary Affairs, Board

Alessandro Barbarino, Special Adviser to the Board, Division of Board Members, Board
David Bowman,2 Senior Associate Director, Division of Monetary Affairs, Board
Fang Cai, Assistant Director, Division of Financial Stability, Board
Mark A. Carlson, Adviser, Division of Monetary Affairs, Board
Stephanie E. Curcuru, Deputy Director, Division of International Finance, Board
Rochelle M. Edge, Deputy Director, Division of Monetary Affairs, Board
Jonas Fisher, Senior Vice President, Federal Reserve Bank of Chicago
Glenn Follette, Associate Director, Division of Research and Statistics, Board
Etienne Gagnon, Associate Director, Division of International Finance, Board
Jenn Gallagher, Assistant to the Board, Division of Board Members, Board
Carlos Garriga, Senior Vice President, Federal Reserve Bank of St. Louis
Michael S. Gibson, Director, Division of Supervision and Regulation, Board
David Glancy, Principal Economist, Division of Monetary Affairs, Board
Joseph W. Gruber, Executive Vice President, Federal Reserve Bank of Kansas City
Christopher J. Gust, Associate Director, Division of Monetary Affairs, Board
Diana Hancock, Senior Associate Director, Division of Research and Statistics, Board
Valerie S. Hinojosa, Section Chief, Division of Monetary Affairs, Board
Colin J. Hottman, Principal Economist, Division of International Finance, Board
Jane E. Ihrig, Special Adviser to the Board, Division of Board Members, Board
Mark J. Jensen, Vice President, Federal Reserve Bank of Atlanta
Benjamin K. Johannsen, Assistant Director, Division of Monetary Affairs, Board
Faten Khoury,2 Senior Financial Institution Policy Analyst, Division of Reserve Bank Operations and
Payment Systems, Board
Michael T. Kiley, Deputy Director, Division of Financial Stability, Board
Don H. Kim, Senior Adviser, Division of Monetary Affairs, Board
Anna R. Kovner, Executive Vice President, Federal Reserve Bank of Richmond
Andreas Lehnert, Director, Division of Financial Stability, Board
Kurt F. Lewis, Special Adviser to the Chair, Division of Board Members, Board
Laura Lipscomb, Special Adviser to the Board, Division of Board Members, Board
Rebecca D. McCaughrin,2 Policy and Market Analysis Director, Federal Reserve Bank of New York

2 Attended through the discussion of developments in financial markets and open market operations.
 16 July 30–31, 2024

Benjamin W. McDonough,3 Deputy Secretary and Ombudsman, Office of the Secretary, Board
Yvette McKnight,4 Senior Agenda Assistant, Office of Secretary, Board
Andrew Meldrum, Assistant Director, Division of Monetary Affairs, Board
Karel Mertens, Senior Vice President, Federal Reserve Bank of Dallas
Thomas Mertens, Vice President, Federal Reserve Bank of San Francisco
Ann E. Misback,5 Secretary, Office of the Secretary, Board
Norman J. Morin, Associate Director, Division of Research and Statistics, Board
Michelle M. Neal, Head of Markets, Federal Reserve Bank of New York
Alyssa O’Connor, Special Adviser to the Board, Division of Board Members, Board
Paolo A. Pesenti, Director of Monetary Policy Research, Federal Reserve Bank of New York
Eugenio P. Pinto, Special Adviser to the Board, Division of Board Members, Board
Odelle Quisumbing,4 Assistant to the Secretary, Office of the Secretary, Board
Andrea Raffo, Senior Vice President, Federal Reserve Bank of Minneapolis
Donald Keith Sill, Senior Vice President, Federal Reserve Bank of Philadelphia
Arsenios Skaperdas, Senior Economist, Division of Monetary Affairs, Board
Gustavo A. Suarez, Assistant Director, Division of Research and Statistics, Board
Manjola Tase, Principal Economist, Division of Monetary Affairs, Board
Thiago Teixeira Ferreira, Special Adviser to the Board, Division of Board Members, Board
Clara Vega, Special Adviser to the Board, Division of Board Members, Board
Jeffrey D. Walker,2 Associate Director, Division of Reserve Bank Operations and Payment Systems,
Board
Randall A. Williams, Group Manager, Division of Monetary Affairs, Board
Paul R. Wood, Special Adviser to the Board, Division of Board Members, Board
Egon Zakrajsek, Executive Vice President, Federal Reserve Bank of Boston
Rebecca Zarutskie, Special Adviser to the Board, Division of Board Members, Board

_______________________
Joshua Gallin
Secretary

3 Attended Wednesday’s session only.

4 Attended through the discussion of the economic and financial situation.
5 Attended Tuesday’s session only.