A read of the minutes from the FOMC meeting in June reveal the Fed is expected to keep the fed funds rate below levels the Committee views as normal in the long run. The Committee also projected that GDP will expand at a faster pace in H2/14.

Highlights from the FOMC Committee Meeting:

The information reviewed for the June 17-18 meeting indicated that real gross domestic product (GDP) had dropped significantly early in the year but that economic growth had bounced back in recent months. The average pace of employment gains stepped up, and the unemployment rate declined markedly in April and held steady in May, although it was still elevated. Consumer price inflation picked up in recent months, while measures of longer-run inflation expectations remained stable.

To support continued progress toward maximum employment and price stability, the Committee reaffirmed its view that a highly accommodative stance of monetary policy remains appropriate. In determining how long to maintain the current 0 to ¼% target range for the federal funds rate, the Committee will assess progress – both realized and expected – toward its objectives of maximum employment and 2% inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee’s 2% longer-run goal, and provided that longer-term inflation expectations remain well anchored.

When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2%. The committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.

Voting for this action: Janet L. Yellen, William C. Dudley, Lael Brainard, Stanley Fischer, Richard W. Fisher, Narayana Kocherlakota, Loretta J. Mester, Charles I. Plosser, Jerome H. Powell, and Daniel K. Tarullo. Voting against this action: None.

Real private expenditures for business equipment and intellectual property products were estimated to have increased slowly in the first quarter as a whole. In April, nominal orders and shipments of nondefense capital goods excluding aircraft decreased a little after rising briskly in March. However, the level of new orders for these capital goods remained above the level of shipments in April, pointing to increases in shipments in subsequent months. Other forward-looking indicators, such as surveys of business conditions, were also generally consistent with modest increases in business equipment spending in the near term. Nominal business spending for nonresidential structures was essentially unchanged in April.

The staff continued to project that real GDP would expand at a faster pace in the second half of this year and over the next two years than it did last year and that it would rise more quickly than potential output.

To view the full Federal Reserve news release, click here.