A look at how the Fed’s views have changed on inflation and the economy

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A comparison of the Federal Reserve’s statements from its two-day meeting that ended Wednesday and its meeting June 17-18:

JOB MARKET:

Now: The Fed sees a better job market, but has added new qualifications: “Labor market conditions improved, with the unemployment rate declining further. However, a range of labour market indicators suggests that there remains significant underutilization of labour resources.”

Then: “Labor market indicators generally showed further improvement. The unemployment rate, though lower, remains elevated.”

INFLATION:

July: Fed policymakers acknowledge that inflation has reached its 2 per cent objective: The Fed “judges that the likelihood of inflation running persistently below 2 per cent has diminished somewhat.”

June: The Fed “recognizes that inflation persistently below its 2 per cent objective could pose risks to economic performance, and it is monitoring inflation developments carefully for evidence that inflation will move back toward its objective over the medium term.”

ECONOMY:

July: The Fed’s assessment is slightly more definitive: “Growth in economic activity rebounded in the second quarter. … Household spending appears to be rising moderately and business fixed investment is advancing.”

June: “Growth in economic activity has rebounded in recent months. … Household spending appears to be rising moderately and business fixed investment resumed its advance.”

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