Tuesday, August 09, 2005

FOMC Meeting Results in an Increase in the Federal Funds Rate

As expected, the Federal Open Market committee (FOMC) raised the federal funds rate by 25 basis points to 3.5% in their meeting today. They believe that their monetary policy is accommodative and "coupled with robust underlying growth in productivity, is providing ongoing support to economic activity." They mention that despite high energy prices, aggregate spending appears to be strong while labor market conditions are continuing to improve. As a result of the increase, they expect price volatility to remain contained and mention that policy accommodation can be removed "at a pace that is likely to be measured."

Sorry I haven't been updating lately. I will try to make a prudent update every day however, I can't guarantee it. As long as there are interesting events happening, it should not be a problem from this end, unless I get too busy with work.