[lbo-talk] FOMC

[Doug Henwood]

[this is more hawkish than I expected, though I don't know what the  
market thinks, to whose wisdom I would, of course, have to defer -  
they're still more worried about inflation and low unemployment  
(euphemized as "the high level of resource utilization") and don't  
seem worried about the financial markets freaking out, regardless of  
what that lunatic Jim Cramer thinks]

<http://www.federalreserve.gov/boarddocs/press/monetary/2007/20070807/ 
default.htm>

For immediate release

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

Economic growth was moderate during the first half of the year.  
Financial markets have been volatile in recent weeks, credit  
conditions have become tighter for some households and businesses,  
and the housing correction is ongoing. Nevertheless, the economy  
seems likely to continue to expand at a moderate pace over coming  
quarters, supported by solid growth in employment and incomes and a  
robust global economy.

Readings on core inflation have improved modestly in recent months.  
However, a sustained moderation in inflation pressures has yet to be  
convincingly demonstrated. Moreover, the high level of resource  
utilization has the potential to sustain those pressures.

Although the downside risks to growth have increased somewhat, the  
Committee's predominant policy concern remains the risk that  
inflation will fail to moderate as expected. Future policy  
adjustments will depend on the outlook for both inflation and  
economic growth, as implied by incoming information.

Voting for the FOMC monetary policy action were: Ben S. Bernanke,  
Chairman; Timothy F. Geithner, Vice Chairman; Thomas M. Hoenig;  
Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; Michael H.  
Moskow; William Poole; Eric Rosengren; and Kevin M. Warsh.