Monetary Policy Report (Federal Reserve Board)
Summary
- Real gross domestic product expanded at a moderate annual rate of 2.1 percent in the first quarter of 2026.p.10
- Household consumption grew at a modest average annualized rate of 1.3 percent through the first five months of 2026.p.10
- The unemployment rate stood at 4.2 percent in June 2026, remaining low and stable since last summer.p.10
- The Federal Open Market Committee maintained the target range for the federal funds rate at 3½ to 3¾ percent.p.11
Key insights
- PCE energy prices leaped 24 percent over the 12 months ending in May 2026 following military conflict in the Middle East and oil supply constraints.p.13
- Housing services price inflation slowed to 3.2 percent over the 12 months ending in May 2026, down from 4.1 percent in the year-earlier period.p.16
- Business-sector labor productivity growth averaged 2.1 percent per year between 2019:Q4 and 2026:Q1, outpacing the prior expansion pace.p.25
- Business fixed investment surged at an 11 percent annual rate in 2026:Q1, heavily driven by high-tech spending on artificial intelligence infrastructure.p.31
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