FOMC Statement March 16, 2004

 

Below is a comparison of today’s Fed statement with the statement it issued after its December meeting. Words with a red line through them appeared in their December statement but not in today’s. Green underlined words appeared in today’s statement but not in the December statement. Note that the Fed did not change its target interest rate.

 

The statement was released at 2:15 pm EST. In the chart below you can see how the financial markets reacted to this statement.  

Release Date: January 28,March 16, 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 confirms that output is expanding briskly.indicates that output is continuing to Although new hiring remains subdued, other indicators suggest an improvement in the labor market.expand at a solid pace. Although job losses have slowed, new hiring has lagged. Increases in core consumer prices are muted and expected to remain low.

The Committee perceivesthat the upside and downside risks to the attainment of sustainable growth for the next few quarters are roughly equal. The probability of an unwelcome fall in inflation has diminished in recent months and now appears almost equal to that of a rise in inflation. With inflation quite low and resource use slack, the Committee believes that it can be patient in removing its policy accommodation.