size=4>style="FONT-WEIGHT: bold; FONT-SIZE: 13pt">
style="FONT-SIZE: 13pt">The Federal Reserve’s monetary policymaking committee
announced today that it has decided to keep its target for overnight interest
rates (the “federal funds rate”) at 5¼ percent.
style="FONT-SIZE: 12pt">
face="Times New Roman" size=3>style="FONT-WEIGHT: bold; FONT-SIZE: 12pt">Highlights of today’s monetary policy
statement:
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The Fed noted that: “The moderation
in economic growth appears to be continuing, partly reflecting a cooling of the
housing market.”
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The Fed said, as it did in its
August 8 policy statement, that “…inflation pressures seem likely to moderate
over time…”
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Also, as it did in August 8 policy
statement, the Fed said that: “The extent and timing of any additional firming
that may be needed…will depend on the evolution of the outlook for both
inflation and economic growth, as implied by incoming
information.
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Policy firming refers to increases
in the Fed’s target overnight interest rate to moderate economic growth and
contain inflation pressures.
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The signal is that future rate
decisions by the Federal Open Market Committee (FOMC), the Fed’s monetary
policymaking committee, will remain “data dependant.”
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The Fed’s next scheduled monetary
policy meeting is October 24 and 25.
style="FONT-SIZE: 12pt">The Fed’s policy statement that was issued today can be
viewed at href="http://www.federalreserve.gov/boarddocs/press/monetary/2006/20060920/">http://www.federalreserve.gov/boarddocs/press/monetary/2006/20060920/face=Arial size=2>style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">
size=3>Jeffrey
Wrasestyle="COLOR: blue">
style="FONT-SIZE: 10pt; COLOR: black">Chief Economist to the Vice
Chairmanstyle="COLOR: black">
style="FONT-SIZE: 10pt; COLOR: black">Joint Economic
Committeestyle="COLOR: black">
style="FONT-SIZE: 10pt; COLOR: black">G-07
style="FONT-SIZE: 10pt; COLOR: black">(202) 224-2335color=black>
style="FONT-SIZE: 10pt">href="mailto:jeff_wrase@jec.senate.gov">jeff_wrase@jec.senate.gov
style="FONT-SIZE: 12pt">