November 15, 1994 FOMC Statement

FOMC statement

FOMC statement

For immediate release

The Federal Reserve Board of Governors today approved an increase in the discount rate from 3 1/2 4 percent to 4 3/4 percent, effective immediately.

In a related move, the Federal Open Market Committee decided that the increase in the discount rate should be reflected fully in interest rates in reserve markets.

These measures were taken against the background of evidence of continuing persistent strength in the economic expansion activity and high and rising levels of resource utilization. The In these circumstances, the Federal Reserve views these actions are intended as necessary to keep inflationary pressures inflation contained, and thereby foster sustainable economic growth.

In taking the discount rate action, the Board approved requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Richmond, Kansas City, St. Louis, and Dallas. Kansas City. The discount rate is the interest rate that is charged depository institutions when they borrow from their district Federal Reserve Banks. banks.

The Federal Reserve announced today the following monetary policy actions:

The Federal Open Market Committee agreed that this increase would be allowed to show through completely into interest rates in reserve markets.

The Federal Reserve will continue to monitor economic and financial developments to gauge the appropriate stance of policy. But these actions are expected to be sufficient, at least for a time, to meet the objective of sustained, noninflationary growth.

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