Redacted June FOMC Statement

April 2009	June 2009	Comments
Information received since the Federal Open Market Committee met in March indicates that the economy has continued to contract, though the pace of contraction appears to be somewhat slower.	Information received since the Federal Open Market Committee met in April suggests that the pace of economic contraction is slowing. Conditions in financial markets have generally improved in recent months.	The FOMC is following trends in the financial markets. The stock market is higher, and credit spreads are tighter, but what of tomorrow?
Household spending has shown signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit.	Household spending has shown further signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit.	The FOMC sees further signs of stabilization of household spending.
Weak sales prospects and difficulties in obtaining credit have led businesses to cut back on inventories, fixed investment, and staffing.	Businesses are cutting back on fixed investment and staffing but appear to be making progress in bringing inventory stocks into better alignment with sales.	They view much of the weakness as being an inventory correction that will end soon.
Although the economic outlook has improved modestly since the March meeting, partly reflecting some easing of financial market conditions, economic activity is likely to remain weak for a time.	Although economic activity is likely to remain weak for a time,	They are more certain that economic conditions have improved.
Nonetheless, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability.	the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability.	Materially the same.
In light of increasing economic slack here and abroad, the Committee expects that inflation will remain subdued. Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term.	The prices of energy and other commodities have risen of late. However, substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time.	They trust that slack capacity will keep inflation low, despite rising commodity prices. They are less worried bout deflation. Stagflation is not a word in their vocabulary.
In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability.	In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability.	Identical
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.	The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.	They are trying to lengthen the view of the market on how long the FOMC is able to maintain a low fed funds rate.
As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year.	As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year.	Identical.
In addition, the Federal Reserve will buy up to $300 billion of Treasury securities by autumn.	In addition, the Federal Reserve will buy up to $300 billion of Treasury securities by autumn.	Identical.
The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets.	The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets.	Identical.
The Federal Reserve is facilitating the extension of credit to households and businesses and supporting the functioning of financial markets through a range of liquidity programs. The Committee will continue to carefully monitor the size and composition of the Federal Reserve’s balance sheet in light of financial and economic developments.	The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted.	Much language change; not much substantive change.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.	Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.	Identical.

Quick Hits:

• The FOMC is following trends in the financial markets. The stock market is higher, and credit spreads are tighter, but what of tomorrow?
• They view much of the weakness as being an inventory correction that will end soon.
• They trust that slack capacity will keep inflation low, despite rising commodity prices. They are less worried bout deflation. Stagflation is not a word in their vocabulary.
• They are trying to lengthen the view of the market on how long the FOMC is able to maintain a low fed funds rate.
• They are projecting calm to all who will listen, but will inflation and the dollar cooperate? Will economic weakness not deepen from here? The jury is out.

Comments

[Socialism c...:]

Brown shoots:
1) States heading towards default.
2) Municipalities struggling, given lower property tax revenues.
3) Mortgage defaults were merely forestalled by temporary freeze, and availability of tax return monies to citizens.
4) New unemployment claims continue unabated; many are reaching the end of their bennies.
5) Government continues to pile on debt
6) Government continues to increase taxes -- e.g. "cap & trade".
7) Government continues to hinder the Liberty of the people -- the true economic engine of this nation!
8) Government actions are driving (and will continue to) a weaker dollar, penalizing those who had prudently saved.
9) Political sanity is GONE -- when you have Congress passing 800-page bills that have NOT been read, much less comprehended -- that is NOT a good sign for the nation's political nor economic future.

Jun 26 03:19 PM

[TeresaE:]

"Inventory correction"

That is rich.

Most companies have been using "just in time" supply for years, there is not much "inventory" unless it is scheduled for current production.

On the manufacturing and construction side of our economy (which would be the only TRUE economy, manufacturing/construc... jobs are the customers for all the financial and "paper" jobs) is DEAD.

Even during the 80s it was not as dead as it is now.

The Fed 100% failed to see that their own policies (repeal of Glass-Steagall, thanks Alan!) created this disaster.

I have ZERO confidence that they have a clue as to how bad it is on the ground.

Fools are running our country and fools keep voting for more of the same.

Jun 27 10:16 AM