[lbo-talk] Fed kicks it up another quarter

[Mark S]

Doug Henwood wrote:
>
>[The tone of this is a little on the hawkish side. For some inexplicable 
>reason, some market types had thought the Fed would pause. They're wrong.]
>
><http://www.federalreserve.gov/BoardDocs/Press/monetary/2005/20050920/default.htm>
>
>September 20, 2005
>
>For immediate release
>
>The Federal Open Market Committee decided today to raise its target for the 
>federal funds rate by 25 basis points to 3-3/4 percent.
>
[snip]
>
>The Committee perceives that, with appropriate monetary policy action, the 
>upside and downside risks to the attainment of both sustainable growth and 
>price stability should be kept roughly equal. With underlying inflation 
>expected to be contained, the Committee believes that policy accommodation 
>can be removed at a pace that is likely to be measured. Nonetheless, the 
>Committee will respond to changes in economic prospects as needed to 
>fulfill its obligation to maintain price stability.
>
Some analysts think that the Fed has its eye on potential labor market 
tightening and concomitant wage gains in 2006 and 2007.  Given the final 
sentence above, this opinion makes sense to me.

M.

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