May 7, 2002 FOMC Statement

Target rate 1.75% unchanged Vote 10–0 Tone: Balanced -0.10

FOMC statement

For immediate release

The Federal Open Market Committee decided today to keep its target for the federal funds rate unchanged at ~~1-3/4~~ 1 3/4 percent.

The information that has become available since the last meeting of the Committee ~~indicates~~ confirms that ~~the economy, bolstered by~~ economic activity has been receiving considerable upward impetus from a marked swing in inventory ~~investment, is expanding at a significant pace.~~ investment. Nonetheless, the degree of the strengthening in final demand over coming quarters, an essential element in sustained economic expansion, is still uncertain.

In these circumstances, although the stance of monetary policy is currently accommodative, the Committee believes that, for the foreseeable future, against the background of its ~~long-run~~ long run goals of price stability and sustainable economic growth and of the information currently available, the risks are balanced with respect to the prospects for both goals.

Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman; William J. McDonough, Vice Chairman; Susan S. Bies; Roger W. Ferguson, Jr.; Edward M. Gramlich; Jerry L. Jordan; Robert D. McTeer, Jr.; Mark W. Olson; Anthony M. Santomero, and Gary H. Stern.

Voting against the action: none.

The Committee decided to include in its announcements following its meetings the roll call of the vote on the federal funds rate target, including the preferred policy choice of any dissenters. This action accelerates the release of this information, currently available in the Minutes with a lag. To conform to this new practice, the Board of Governors also decided to report in the written announcement the roll call of any vote on the discount rate, also including the preferred policy choice of any dissenters.

Source

Our summary

What changed

The FOMC kept the federal funds rate target unchanged at 1 3/4 percent.
The economic language shifted from 'indicates' to 'confirms' that activity is receiving 'considerable upward impetus' from the inventory swing.
The statement removed the paragraph announcing the new practice of including roll-call votes in announcements.
The current statement adds an explicit line stating 'Voting against the action: none.'
The vote list is otherwise identical, with no dissents recorded.

Implications

The upgraded language from 'indicates' to 'confirms' signals greater confidence in the inventory-driven expansion, though the uncertainty about final demand remains.

The removal of the procedural vote-disclosure paragraph reflects that the practice is now established, and the explicit no-dissent line underscores unanimous support for the unchanged stance.

Markets may read the balanced-risk language and unanimous vote as a signal that policy is likely to remain on hold in the near term.

Summary generated automatically from the statements. Not investment advice.