September 16, 2008
August 05, 2008
Statement·Presser·Minutes
BBBen S. BernankeSeptember 16, 2008 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 2 percent.
Economic activity expanded Strains in the second quarter, partly reflecting growth in consumer spending and exports. However, labor financial markets have softened further increased significantly and financial labor markets remain under considerable stress. have weakened further. Economic growth appears to have slowed recently, partly reflecting a softening of household spending. Tight credit conditions, the ongoing housing contraction, and elevated energy prices some slowing in export growth are likely to weigh on economic growth over the next few quarters. Over time, the substantial easing of monetary policy, combined with ongoing measures to foster market liquidity, should help to promote moderate economic growth.
Inflation has been high, spurred by the earlier increases in the prices of energy and some other commodities, and some indicators of inflation expectations have been elevated. commodities. The Committee expects inflation to moderate later this year and next year, but the inflation outlook remains highly uncertain.
Although The downside risks to growth remain, and the upside risks to inflation are also both of significant concern to the Committee. The Committee will continue to monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Christine M. Cumming; Elizabeth A. Duke; Richard W. Fisher; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; Sandra Pianalto; Charles I. Plosser; Gary H. Stern; and Kevin M. Warsh. Voting against was Richard W. Fisher, who preferred an increase in Ms. Cumming voted as the target alternate for the federal funds rate at this meeting. Timothy F. Geithner.
Our summary
What changed
- The FOMC kept the federal funds rate target at 2 percent, the same as the previous meeting.
- Economic assessment shifted: growth now appears to have slowed recently, with household spending softening and export growth slowing, replacing mention of second-quarter expansion.
- Financial market strains are described as having increased significantly, and labor markets weakened further, a more negative tone than the prior statement.
- The inflation outlook paragraph dropped the mention of elevated inflation expectations but retained expectations for moderation and high uncertainty.
- The vote was unanimous for the action; Richard Fisher, who previously dissented favoring a hike, voted with the majority, and Christine Cumming replaced Timothy Geithner as alternate.
Implications
The statement reflects heightened concern about financial market stress and slowing growth, suggesting a bias toward possible future easing, though inflation risks remain a counterweight.
The removal of dissension and the more cautious tone on growth may be read as signaling readiness to act if conditions worsen, with careful monitoring emphasized.
Summary generated automatically from the statements. Not investment advice.