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.
The drag on demand and profits from
rising energy costs, as well as eroding consumer confidence, reports of
substantial shortfalls in sales and earnings, and stress in some segments
of the financial markets suggest that economic growth may be slowing
further. While some inflation risks persist, they are diminished by the
more moderate pace of economic activity and by the absence of any
indication that longer-term inflation expectations have increased. The
Committee will continue to monitor closely the evolving economic
Against the background of its long-run
goals of price stability and sustainable economic growth and of the
information currently available, the Committee consequently believes that
the risks are weighted mainly toward conditions that may generate economic
weakness in the foreseeable future.
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Last modified: March 11, 2001
Published By Tulips and Bears