INVESTMENT BANKING DIVISION | SINCE 1928 Fed Announcement June 19, 2019

Fed Chair Source: Huffington Post

Target Rate Remains the Same

The decided to keep interest rates unchanged at the 2.25%-2.50% trading range. Bloomberg news stated that the FOMC, “dropped a reference in their statement to being ‘patient’ on borrowing costs and forecast a larger miss of their 2% inflation target this year.” Source: Bloomberg News

Please see the comparison of the last two FOMC statements provided by Bloomberg.

2019 FOMC Meetings July 30 – 31 September 17 – 18* October 29 – 30 December 10 – 11* *Meeting associated with a Summary of Economic Projections and a press conference by the Chair.

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June 2019 May 2019

Information received since the Federal Open Market Information received since the Federal Open Market Committee met in May indicates that the labor Committee met in March indicates that the labor market remains strong and that economic activity market remains strong and that economic activity is rising at a moderate rate. Job gains have been rose at a solid rate. Job gains have been solid, solid, on average, in recent months, and the on average, in recent months, and the unemployment rate has remained low. Although rate has remained low. Growth of household growth of household spending appears to have spending and business fixed investment slowed in picked up from earlier in the year, indicators of the first quarter. On a 12-month basis, overall business fixed investment have been soft. On a 12- inflation and inflation for items other than food month basis, overall inflation and inflation for and energy have declined and are running below 2 items other than food and energy are running below percent. On balance, market-based measures of 2 percent. Market-based measures of inflation inflation compensation have remained low in recent compensation have declined; survey-based measures months, and survey-based measures of longer-term of longer-term inflation expectations are little inflation expectations are little changed. changed. Consistent with its statutory mandate, the Consistent with its statutory mandate, the Committee seeks to foster maximum employment and Committee seeks to foster maximum employment and price stability. In support of these goals, the price stability. In support of these goals, the Committee decided to maintain the target range for Committee decided to maintain the target range for the rate at 2-1/4 to 2-1/2 percent. the at 2-1/4 to 2-1/2 percent. The Committee continues to view sustained The Committee continues to view sustained expansion of economic activity, strong labor expansion of economic activity, strong labor market conditions, and inflation near the market conditions, and inflation near the Committee’s symmetric 2 percent objective as the Committee’s symmetric 2 percent objective as the most likely outcomes. In light of global economic most likely outcomes, but uncertainties about this and financial developments and muted inflation outlook have increased. In light of these pressures, the Committee will be patient as it uncertainties and muted inflation pressures, the determines what future adjustments to the target Committee will closely monitor the implications of range for the federal funds rate may be incoming information for the economic outlook and appropriate to support these outcomes. will act as appropriate to sustain the expansion, with a strong labor market and inflation near its In determining the timing and size of future symmetric 2 percent objective. adjustments to the target range for the federal funds rate, the Committee will assess realized and In determining the timing and size of future expected economic conditions relative to its adjustments to the target range for the federal maximum employment objective and its symmetric 2 funds rate, the Committee will assess realized and percent inflation objective. This assessment will expected economic conditions relative to its take into account a wide range of information, maximum employment objective and its symmetric 2 including measures of labor market conditions, percent inflation objective. This assessment will indicators of inflation pressures and inflation take into account a wide range of information, expectations, and readings on financial and including measures of labor market conditions, international developments. indicators of inflation pressures and inflation expectations, and readings on financial and Voting for the FOMC monetary policy action were: international developments. Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; James Voting for the monetary policy action were Jerome Bullard; Richard H. Clarida; Charles L. Evans; H. Powell, Chair; John C. Williams, Vice Chair; Esther L. George; Randal K. Quarles; and Eric S. Michelle W. Bowman; Lael Brainard; Richard H. Rosengren. Clarida; Charles L. Evans; Esther L. George; Randal K. Quarles; and Eric S. Rosengren. Voting against the action was James Bullard, who preferred at this meeting to lower the target range for the federal funds rate by 25 basis points.