FOMC Lifts Funds Rate 25 bps, Policy Changes As Needed
FOMC Statement ]
From the Board website at: http://www.federalreserve.gov/
The Federal Open Market Committee decided today to raise its target for the
federal funds rate by 25 basis points to 4-1/4 percent.
Despite elevated energy prices and hurricane-related disruptions, the expansion
in economic activity appears solid. Core inflation has stayed relatively low in
recent months and longer-term inflation expectations remain contained.
Nevertheless, possible increases in resource utilization as well as elevated
energy prices have the potential to add to inflation pressures.
The Committee judges that some further measured policy firming is likely to be
needed to keep the risks to the attainment of both sustainable economic growth
and price stability roughly in balance. In any event, the Committee will respond
to changes in economic prospects as needed to foster these objectives.
Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman;
Timothy F. Geithner, Vice Chairman; Susan S. Bies; Roger W. Ferguson, Jr.;
Richard W. Fisher; Donald L. Kohn; Michael H. Moskow; Mark W. Olson; Anthony M.
Santomero; and Gary H. Stern.
In a related action, the Board of Governors unanimously approved a 25-basis
point increase in the discount rate to 5-1/4 percent. In taking this action, the
Board approved the requests submitted by the Boards of Directors of the Federal
Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta,
Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco.