March 21, 2007
January 31, 2007
Statement·Presser·Minutes
BBBen S. BernankeMarch 21, 2007 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 at 5-1/4 percent.
Recent indicators have suggested somewhat firmer economic growth, been mixed and some tentative signs of stabilization have appeared the adjustment in the housing market. Overall, sector is ongoing. Nevertheless, the economy seems likely to continue to expand at a moderate pace over coming quarters.
Readings Recent readings on core inflation have improved modestly in recent months, and been somewhat elevated. Although inflation pressures seem likely to moderate over time. However, time, the high level of resource utilization has the potential to sustain inflation those pressures.
The Committee judges In these circumstances, the Committee's predominant policy concern remains the risk that some inflation risks remain. The extent and timing of any additional firming that may be needed will fail to address these risks moderate as expected. Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Susan S. Bies; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Cathy E. Minehan; Frederic S. Mishkin; Michael H. Moskow; William Poole; and Kevin M. Warsh.
Our summary
What changed
- The FOMC revised its economic assessment, noting mixed recent indicators and an ongoing housing adjustment, replacing the previous language about firmer growth and tentative housing stabilization.
- It upgraded its inflation language, stating that recent core inflation readings have been somewhat elevated, whereas the prior statement said they had improved modestly.
- The FOMC emphasized that its predominant policy concern remains the risk that inflation will fail to moderate as expected, a more explicit statement than the previous 'some inflation risks remain.'
- The vote was unanimous, with the same ten members voting as in January, but the list of voters changed: Susan S. Bies was replaced by Thomas M. Hoenig, who had previously been an alternate.
Implications
The shift to describing core inflation as 'somewhat elevated' and highlighting the risk of it failing to moderate suggests a more hawkish tone, potentially signaling a higher bar for rate cuts or a greater willingness to hike if inflation persists.
The removal of the phrase 'extent and timing of any additional firming' and the substitution of 'future policy adjustments' may indicate a more neutral forward guidance, leaving the door open for either tightening or easing depending on data.
Summary generated automatically from the statements. Not investment advice.