The committee said economic growth has been “rising at a solid rate,” an upgrade from “moderate” in May. The unemployment rate has “declined,” as opposed to “stayed low,” and household spending “has picked up,” an upgrade from “moderated.”
With that in mind, the committee said two more rate hikes were appropriate, bringing the 2018 total to four increases. Its first hike this year was in March.
“The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective over the medium term,” the statement said.
That sentence itself featured multiple instances of more hawkish language.
The committee previously had characterized rate hikes as “gradual adjustments” rather than “increases,” and the “sustained expansion” portion was completely new.
However, the statement twice retained language that the Fed had a “symmetric” 2 percent inflation target, indicating a tendency to let price pressures run a little hot before putting the clamps on growth.