[lbo-talk] FOMC:

[Doug Henwood]

[This is the Fed's way of preparing the markets for a tightening, but 
not an imminent one. "Measured" replaces "patient," a slightly more 
hawkish word. Stocks rose and interest rates fell in relief; 
expectations were for tougher language.]

<http://www.federalreserve.gov/boarddocs/press/monetary/2004/20040504/default.htm>

Release Date: May 4, 2004

For immediate release

The Federal Open Market Committee decided today to keep its target 
for the federal funds rate at 1 percent.

The Committee continues to believe that an accommodative stance of 
monetary policy, coupled with robust underlying growth in 
productivity, is providing important ongoing support to economic 
activity. The evidence accumulated over the intermeeting period 
indicates that output is continuing to expand at a solid rate and 
hiring appears to have picked up. Although incoming inflation data 
have moved somewhat higher, long-term inflation expectations appear 
to have remained well contained.

The Committee perceives the upside and downside risks to the 
attainment of sustainable growth for the next few quarters are 
roughly equal. Similarly, the risks to the goal of price stability 
have moved into balance. At this juncture, with inflation low and 
resource use slack, the Committee believes that policy accommodation 
can be removed at a pace that is likely to be measured.

Voting for the FOMC monetary policy actions were: Alan Greenspan, 
Chairman; Timothy F. Geithner, Vice Chairman; Ben S. Bernanke; Susan 
S. Bies; Roger W. Ferguson, Jr.; Edward M. Gramlich; Thomas M. 
Hoenig; Donald L. Kohn; Cathy E. Minehan; Mark W. Olson; Sandra 
Pianalto; and William Poole.