Global| Sep 16 2008FOMC Left Funds Rate Again at 2.00%
by:Tom Moeller
|in:Economy in Brief
Summary
As expected, the Federal Open Market Committee left the Federal funds rate unchanged today at 2.00%. The discount rate also was left unchanged at 2.25%. If the Fed had eased, it would have been in the name of boosting market [...]
As expected, the Federal Open Market Committee left the Federal funds rate unchanged today at 2.00%. The discount rate also was left unchanged at 2.25%.
If the Fed had eased, it would have been in the name of boosting market psychology. The markets have been rattled by a significant number of downside risks to economic growth. These include strains in the financial sector as well as weaker labor markets. Weaker consumer spending, tight credit conditions, the housing contraction and slower export growth also were sited in the statement as constraints on economic growth.
While acknowledging these risks, the Fed stated that "Over time, the substantial easing of monetary policy, combined with ongoing measures to foster market liquidity, should help to promote moderate economic growth."
The Fed's statement regarding inflation was unchanged from the last meeting. "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. The Committee expects inflation to moderate later this year and next year, but the inflation outlook remains highly uncertain."
The decision was unanimous amongst FOMC voters.
For the complete text of the Fed's latest press release please follow this link.
How Economic News Moves Markets from the Federal Reserve Bank of New York can be found here.
What Drives Housing Prices? also from the Federal Reserve Bank of New York is available here.
| Current | Last | August | 2007 | 2006 | 2005 | |
|---|---|---|---|---|---|---|
| Federal Funds Rate, % (Target) | 2.00 | 2.00 | 2.00 | 5.05 | 4.96 | 3.19 |
| Discount Rate, % | 2.25 | 2.25 | 2.25 | 5.86 | 5.96 | 4.19 |
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.
More Economy in Brief
