June 26, 2002
May 7, 2002
Statement·Presser·Minutes·Policy
AGAlan GreenspanJune 26, 2002 FOMC Statement
FOMC statement
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 percent.
The information that has become available since the last meeting of the Committee confirms that economic activity has been receiving considerable is continuing to increase. However, both the upward impetus from a marked the swing in inventory investment. Nonetheless, investment and the degree of the strengthening growth in final demand appear to have moderated. The Committee expects the rate of increase of final demand to pick up over coming quarters, an essential element supported in sustained economic expansion, is still part by robust underlying growth in productivity, but the degree of the strengthening remains 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 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.
Our summary
What changed
- The FOMC updated its economic assessment, noting that activity is continuing to increase, whereas the previous statement emphasized a marked swing in inventory investment.
- It now says both the inventory impetus and final demand growth have moderated, a shift from the prior emphasis on considerable upward impetus.
- The FOMC added that it expects final demand growth to pick up, supported by robust productivity growth, but still sees uncertainty about the degree of strengthening.
- The federal funds rate target remains unchanged at 1 3/4 percent, and the vote was unanimous in both statements.
Implications
The revised language suggests the FOMC sees the initial boost from inventory restocking fading, but it maintains a balanced risk assessment, indicating no near-term policy shift is signaled.
Markets may interpret the added productivity reference as a slightly more optimistic tone on the economy's potential, though the continued uncertainty tempers any hawkish reading.
Summary generated automatically from the statements. Not investment advice.