WASHINGTON, June 25 (Reuters) - Following is the full text
of the Federal Open Market Committee's interest rate policy
statement issued on Wednesday at the close of its June 24-25
meeting:
"The Federal Open Market Committee decided today to lower its
target for the federal funds rate by 25 basis points to 1
percent. In a related action, the Board of Governors approved a
25 basis point reduction in the discount rate to 2 percent.
The Committee continues to believe that an accommodative stance
of monetary policy, coupled with still robust underlying growth
in productivity, is providing important ongoing support to
economic activity. Recent signs point to a firming in spending,
markedly improved financial conditions, and labor and product
markets that are stabilizing. The economy, nonetheless, has yet
to exhibit sustainable growth. With inflationary expectations
subdued, the Committee judged that a slightly more expansive
monetary policy would add further support for an economy which
it expects to improve over time.
The Committee perceives that the upside and downside risks to
the attainment of sustainable growth for the next few quarters
are roughly equal. In contrast, the probability, though minor,
of an unwelcome substantial fall in inflation exceeds that of a
pickup in inflation from its already low level. On balance, the
Committee believes that the latter concern is likely to
predominate for the foreseeable future.
Voting for the FOMC monetary policy action were Alan Greenspan,
Chairman; Ben S. Bernanke; Susan S. Bies; J. Alfred Broaddus,
Jr.; Roger W. Ferguson, Jr.; Edward M. Gramlich; Jack Guynn;
Donald L. Kohn; Michael H. Moskow; Mark W. Olson; and Jamie B.
Stewart, Jr.
Voting against the action was Robert T. Parry. President Parry
preferred a 50 basis point reduction in the target for the
federal funds rate.
In taking the discount rate action, the Federal Reserve Board
approved the requests submitted by the Boards of Directors of
the Federal Reserve Banks of Boston, New York, St. Louis,
Kansas City, and San Francisco."
Copyright 2003, Reuters News Service |
