This entry was posted on Tuesday, August 7th, 2007 at 12:34 pm and is filed under Economy, Mortgage Rates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
The Fed Holds Rates Steady, Disappoints Markets
The Fed adjorned today leaving rates unchanged. Citing a desire to see more convincing signs of a “sustained moderation” in inflation, they kept up their hypervigilant stance against inflation. The decision disappointed the markets laboring under the recent spillover of the mortgage problems into the credit markets.
Here’s the text of the Press Release:
For immediate release
The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.
Economic growth was moderate during the first half of the year. Financial markets have been volatile in recent weeks, credit conditions have become tighter for some households and businesses, and the housing correction is ongoing. Nevertheless, the economy seems likely to continue to expand at a moderate pace over coming quarters, supported by solid growth in employment and incomes and a robust global economy.
Readings on core inflation have improved modestly in recent months. However, a sustained moderation in inflation pressures has yet to be convincingly demonstrated. Moreover, the high level of resource utilization has the potential to sustain those pressures.
Although the downside risks to growth have increased somewhat, the Committee’s predominant policy concern remains the risk that inflation will fail to moderate as expected. Future policy adjustments will depend on the outlook for both inflation and economic growth, as implied by incoming information.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; Michael H. Moskow; William Poole; Eric Rosengren; and Kevin M. Warsh.
August 7th, 2007 at 12:41 pm
This is getting crazy. The Fed is seeing ghosts. Where’s the inflation? The annualized numbers have s fallen within the Fed’s target zone, and the lights are about to go out on consumer spending.
August 8th, 2007 at 6:38 am
Initially a strong supporter of the Bernanke appt., he has proven to be a either a man in fear of making a decision or someones pawn. There is no greater damage caused by a leader without action in midst of a downward market whether it be government, private enterprise or publicly traded business. It’s easy to be “the man” when the market is good” the measure of “the man” is the actions taken ahead of a storm. Talk about denial. I nominate Jim Cramer….think we could get him to take the cut in pay?