The pace of economic activity has moderated somewhat, according to the latest information from the Federal Open Market Committee meeting minutes. The meeting noted that labor market conditions continued to improve, with strong job gains and a lower unemployment rate, and participants judged that underutilization of labor resources was continuing to diminish.

The previous FOMC report released on March 18 stated that the FOMC voted to not raise interest rates. Once again, the FOMC said that the current 0-0.25% target range for the federal funds rate remains appropriate.

This time the committee touched on Chair Yellen’s statement at the Monetary Policy Report testimony that the eventual removal of the language in the policy statement noting that “the committee judges that it can be patient in beginning to normalize the stance of monetary policy,” which should not be viewed as indicating that the federal funds rate would necessarily be increased within a couple of meetings.

“However, the effects of these communications on the expected path for the federal funds rate were more than offset by reactions to stronger-than-expected data for the labor market and consumer inflation, along with perceptions of receding downside risks to the foreign economic outlook. On net, the expected path for the federal funds rate implied by financial market quotes shifted up over the period,” the minutes stated.

Most participants judged that it would be appropriate for the federal funds rate in 2017 to remain below its longer run normal level, with nearly half of them projecting the federal funds rate in 2017 to be more than ½ percentage point lower than their estimates of its longer-run value.