It is Fed today. As usual, the WSJ‘s provides an excellent dissection of the Fed Statement:
WSJ: "THE FEDERAL RESERVE’S STATEMENTS reflect how the members of the central bank’s Federal Open Market Committee perceive the economy. Their words have world-wide impact and the slightest changes are scrutinized for clues about where interest rates may be headed.
The May 3 statement, issued after the third meeting of the year, announced that the Fed was raising its key short-term interest rate by one-quarter point to 3.0%, its eighth increase in a row. The central bank showed more concern with oil prices affecting purchasing power, but didn’t signal any plans to alter its current campaign of gradual interest-rate increases — a change some were expecting. In a strange twist, the Fed at first omitted a key phrase on inflation from the previous statement – "Longer-term inflation expectations remain well contained." But then, late in the day, the Fed said the omission was a mistake and issued a revised statement. Below is a look at differences between the March statement and the May one. (Note: All bolding shown below appeared on the Fed statement.)
click for larger graphic
graphc courtesy of Online WSJ
PARSING THE FED
Keeping the Pace
WSJ, May 3, 2005