The Fed Rates the Economy

The Fed issued a press release on Wednesday. Nothing has really changed except they stated the obvious - the economy is slowing. It was also a little less wordy. Perhaps the fed governors read Elements of Style between meetings.

Oh, the stock market went up. But it always goes up.

Bold indicates that there was a change in the statement.

Italics indicate the Fed isn't talking as much.

Wednesday's Press Release

The Federal Open Market Committee decided to keep its target for the federal funds rate at 5-1/4 percent.

Economic growth slowed in the first part of this year and the adjustment in the housing sector is ongoing. Nevertheless, the economy seems likely to expand at a moderate pace over the coming quarters.

Core inflation remains somewhat elevated. Although inflation pressures seem likely to moderate over time, the high level of resource utilization has the potential to sustain those pressures.

In these circumstances, the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected. Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.

March 21 Press Release

The Federal Open Market Committee decided to keep its target for the federal funds rate at 5-1/4 percent.

Recent indicators have been mixed and the adjustment in the housing sector is ongoing. Nevertheless, the economy seems likely to continue to expand at a moderate pace over the coming quarters.

Recent readings on core inflation have been somewhat elevated. Although inflation pressures seem likely to moderate over time, the high level of resource utilization has the potential to sustain those pressures.

In these circumstances, the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected. Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.

Not that any of this really matters very much.