The Federal Open Market
Committee at its meeting today decided to maintain the existing
stance of monetary policy, keeping its target for the federal
funds rate at 6-1/2 percent.
Recent data suggest that the
expansion of aggregate demand may be moderating toward a pace
closer to the rate of growth of the economy's potential to
produce. Although core measures of prices are rising slightly
faster than a year ago, continuing rapid advances in productivity
have been containing costs and holding down underlying price
Nonetheless, signs that growth
in demand is moving to a sustainable pace are still tentative and
preliminary, and the utilization of the pool of available workers
remains at an unusually high level.
In these circumstances, and
against the background of its long-term goals of price stability
and sustainable economic growth and of the information currently
available, the Committee believes the risks continue to be
weighted mainly toward conditions that may generate heightened
inflation pressures in the foreseeable future.