FOMC keeps the rates at 2%.
Here is the press release.
The Federal Open Market Committee decided today to keep its target for the federal funds rate at 2 percent.
There weren't any suckers who knew the dovish fed would raise rates.
Economic activity expanded in the second quarter, partly reflecting growth in consumer spending and exports. However, labor markets have softened further and financial markets remain under considerable stress. Tight credit conditions, the ongoing housing contraction, and elevated energy prices 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.
So even though the economy expanded, we are keeping our rates (WAY) below inflation rate because we still have many issues. Tight credit conditions despite the fact that we provided almost a trillion dollar of loans to the banks. Higher energy prices caused by our rate cuts are still high. And the housing contraction could worsen as mortgage rates are still rising.
Inflation has been high, spurred by the earlier increases in the prices of energy and some other commodities, and some indicators of inflation expectations have been elevated. The Committee expects inflation to moderate later this year and next year, but the inflation outlook remains highly uncertain.
Inflation is high but who cares. We need some kind of inflation statement in there. Has there ever been a time when we were NOT concerned about inflation? Never at least when it comes to talking. Actions...that's a different topic all together.
Although downside risks to growth remain, the upside risks to inflation are also of significant concern to the Committee. The Committee will continue to monitor economic and financial developments and will act as needed to promote sustainable economic growth and price stability.
Who cares about inflation? But remember we need to talk tough.
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