December 19, 1995
July 6, 1995
Statement·Presser·Minutes
AGAlan GreenspanDecember 19, 1995 FOMC Statement
FOMC statement
FOMC statement
For immediate release
Chairman Alan Greenspan announced today that the Federal Open Market Committee decided to decrease slightly the degree of pressure on bank reserve positions.
Since the last easing of monetary policy in July, inflation has been somewhat more favorable than anticipated, and this result along with an associated moderation in inflation expectations warrants a modest easing in monetary conditions.
Today's This action will is expected to be reflected in a 25 basis point decline in the federal funds rate of 25 basis points, from about 6 5 3/4 percent to about 5-3/4 5 1/2 percent.
As a result of the monetary tightening initiated in early 1994, inflationary pressures have receded enough to accommodate a modest adjustment in monetary conditions.
Our summary
What changed
- The FOMC again decided to decrease slightly the degree of pressure on reserve positions, easing policy for the second time in 1995.
- The federal funds rate target was cut by 25 basis points, from about 5 3/4 percent to about 5 1/2 percent.
- The rationale shifted from citing the effects of the 1994 tightening to noting that inflation has been more favorable than anticipated since July.
- The new statement adds that a moderation in inflation expectations, alongside the favorable inflation data, warrants the modest easing.
Implications
The updated language suggests the FOMC sees recent inflation performance as validating further accommodation, with expectations playing a supporting role.
Markets may interpret the shift as a signal that the easing cycle could continue if inflation remains subdued, though the statement offers no explicit forward guidance.
Summary generated automatically from the statements. Not investment advice.