Semi-Daily Journal Archive

The Blogspot archive of the weblog of J. Bradford DeLong, Professor of Economics and Chair of the PEIS major at U.C. Berkeley, a Research Associate of the National Bureau of Economic Research, and former Deputy Assistant Secretary of the U.S. Treasury.

Wednesday, September 20, 2006

The Fed's Pause Continues

Mark Thoma writes:

Economist's View: The Fed Leaves Target Rate Unchanged at 5.25%: The key differences from the last Press Release are:

  1. They have dropped the word "gradual" from their description of the cooling of the housing market.
  2. They see energy prices as moderating. The statement no longer mentions energy prices as a potential cause of slower growth, but energy prices are mentioned as a reason to expect inflation to moderate.
  3. Just like last meeting, the vote wasn't unanimous - Jeffrey Lacker dissented.
  4. The Committee notes, as it did last meeting, that inflation risks remain and further rate moves will depend upon how these risks play out. It does not mention risks to economic growth explicitly as it does with inflation, but housing is mentioned as a growth moderating factor.

Good luck, Ben and company...

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