FOMC 09 16 2008

FOMC left the fed rate on hold The Federal Open Market Committee decided today to keep its target for the federal funds rate at 2 percent. Tight credit condition, ongoing housing contraction, weakening labor market, slowing export growth, and sapping consumer spending will continue to weigh on economic growth. But the eased monetary policy and ongoing measures to foster market liquidity will help promote moderate economic growth. Strains in financial markets have increased significantly and labor markets have weakened further. Economic growth appears to have slowed recently, partly reflecting a softening of household spending. Tight credit conditions, the ongoing housing contraction, and some slowing in export growth are likely to weigh on economic growth over the next few quarters. Over time, the substantial easing of monetary policy, combined with ongoing measures to foster market liquidity, should help to promote moderate economic growth. Inflation is expected to moderate later this year. Inflation has been high, spurred by the earlier increases in the prices of energy and some other commodities. The Committee expects inflation to moderate later this year and next year, but the inflation outlook remains highly uncertain. The downside risks to growth and upside riks to inflation are of significant concern to the Committee. The committee will contiue monitoring economic and financial development carefully. The downside risks to growth and the upside risks to inflation are both of significant concern to the Committee. The Committee will monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability. Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Christine M. Cumming; Elizabeth A. Duke; Richard W. Fisher; Donald L. Kohn; Randall S. Kroszner; Sandra Pianalto; Charles I. Plosser; Gary H. Stern; and Kevin M. Warsh. Ms. Cumming voted as the alternate for Timothy F. Geithner.