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March 16, 2004 January 28, 2004

Statement·Presser·Minutes

AGAlan Greenspan

March 16, 2004 FOMC Statement

Target rate 1.00% unchanged Vote 12–0 Tone: Leaning dovish -0.74
At a glance·Statement·Our summary

FOMC statement

FOMC statement

For immediate release

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 1 percent.

The Committee continues to believe that an accommodative stance of monetary policy, coupled with robust underlying growth in productivity, is providing important ongoing support to economic activity. The evidence accumulated over the intermeeting period confirms indicates that output is expanding briskly. continuing to expand at a solid pace. Although job losses have slowed, new hiring remains subdued, other indicators suggest an improvement in the labor market. has lagged. Increases in core consumer prices are muted and expected to remain low.

The Committee perceives that the upside and downside risks to the attainment of sustainable growth for the next few quarters are roughly equal. The probability of an unwelcome fall in inflation has diminished in recent months and now appears almost equal to that of a rise in inflation. With inflation quite low and resource use slack, the Committee believes that it can be patient in removing its policy accommodation.

Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman; Timothy F. Geithner, Vice Chairman; Ben S. Bernanke; Susan S. Bies; Roger W. Ferguson, Jr.; Edward M. Gramlich; Thomas M. Hoenig; Donald L. Kohn; Cathy E. Minehan; Mark W. Olson; Sandra Pianalto; and William Poole.

Source

Our summary

What changed

  • The FOMC updated its description of economic activity, noting output is expanding at a solid pace rather than briskly.
  • The labor market characterization was revised: job losses have slowed, but new hiring has lagged, replacing the previous mention of subdued hiring and other indicators suggesting improvement.
  • The statement retained the federal funds rate target at 1 percent and kept the same risk assessment and patient stance on removing accommodation.
  • The vote was unanimous and identical to the previous meeting, with all 12 members voting for the action.

Implications

The revised language suggests the FOMC sees continued solid growth but a still-soft labor market, reinforcing its patient approach to policy normalization. Markets may interpret the unchanged risk balance and inflation language as signaling no imminent rate change.

Summary generated automatically from the statements. Not investment advice.