Global| Dec 12 2006FOMC: Funds Rate Steady, Economy OK, Inflation Risks Remain
by:Tom Moeller
|in:Economy in Brief
Summary
At today's Federal Open Market Committee meeting the target interest rate for Federal funds was held steady at 5.25%. The rate was increased to the current level at the FOMC meeting in late June. Voting against the decision for the [...]
At today's Federal Open Market Committee meeting the target interest rate for Federal funds was held steady at 5.25%. The rate was increased to the current level at the FOMC meeting in late June.
Voting against the decision for the fourth consecutive meeting was Richmond Federal Reserve Bank President Jeffrey M. Lacker, who preferred an increase of 25 basis points in the federal funds rate target.
The discount rate also was held steady at 6.25%.
Today's decision was widely expected by analysts.
For the economy today's press release indicated that "Economic growth has slowed ...." but that "the economy seems likely to expand at a moderate pace on balance over coming quarters."
Regarding inflation the Fed indicated that "... core inflation (readings) have been elevated, and the high level of resource utilization has the potential to sustain inflation pressures. However, inflation pressures seem likely to moderate over time ..."
For the complete text of the Fed's latest press release please follow this link.
Trend Inflation and Inflation Persistence in the New Keynesian Phillips Curve from the Federal Reserve Bank of New York can be found here.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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