FED VOTE RETAINS RATE LEVEL : MOVE ANTICIPATES MODERATE GROWTH.Byline: Richard W. Stevenson The New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times The Federal Reserve voted Wednesday to leave interest rates unchanged, betting that a recent surge in economic growth will moderate and leave wage and price inflation under control. The decision continues a yearlong year·long adj. Lasting one year. Adj. 1. yearlong - lasting through a year; "attending yearlong courses" long - primarily temporal sense; being or indicating a relatively great or greater than average duration or pattern in which the Fed has kept monetary policy on hold as the economy has accelerated, slowed and then accelerated again. The Fed's last move was Jan. 31, 1996, when it reduced its federal funds Federal Funds Funds deposited to regional Federal Reserve Banks by commercial banks, including funds in excess of reserve requirements. Notes: These non-interest bearing deposits are lent out at the Fed funds rate to other banks unable to meet overnight reserve target rate, its overnight loan rate for banks, to 5.25 percent from 5.5 percent, and its discount rate for loans to financial institutions to 5 percent from 5.25 percent. Because the Fed's decision Wednesday not to raise rates had been widely anticipated for weeks in the financial markets, it was not a powerful enough dose of good news to stop a technology-led swoon in stock prices. The Dow Jones industrial average Dow Jones Industrial Average The best known U.S. index of stocks. A price-weighted average of 30 actively traded blue-chip stocks, primarily industrials including stocks that trade on the New York Stock Exchange. fell 86.58 points, to 6,746.90. Since last summer, the Fed's official policy has been a ``bias'' toward tightening, a way of signaling that it will raise rates at the first compelling evidence that inflation might be taking root. Economists said they expected that the Fed kept the policy in place Wednesday, although it would not disclose its decision until after the next meeting of its policy-making pol·i·cy·mak·ing or pol·i·cy-mak·ing n. High-level development of policy, especially official government policy. adj. Of, relating to, or involving the making of high-level policy: body March 25. By keeping rates unchanged, the Fed is once again waiting for further evidence of whether growth will slow sufficiently to keep wages from spiking up and setting off an upward spiral spiral /spi·ral/ (spi´ral) 1. helical; winding like the thread of a screw. 2. helix; a winding structure. in inflation. |
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