Shorter Fed Statement:
Cut 1/4 point federal funds rate
Cut 1/4 point discount rate
Growth slowing, inflation risks remain
Mr. Market no-likey the no-happy talk . . . Dow off
175 275 as I type this
Complete Fed statement after the jump . . .
Release Date: December 11, 2007
The Federal Open Market Committee decided today to lower its target for the federal funds rate 25 basis points to 4-1/4 percent.
Incoming information suggests that economic growth is slowing,
reflecting the intensification of the housing correction and some
softening in business and consumer spending. Moreover, strains in
financial markets have increased in recent weeks. Today’s action,
combined with the policy actions taken earlier, should help promote
moderate growth over time.
Readings on core inflation have improved modestly this year, but
elevated energy and commodity prices, among other factors, may put
upward pressure on inflation. In this context, the Committee judges
that some inflation risks remain, and it will continue to monitor
inflation developments carefully.
Recent developments, including the deterioration in financial market
conditions, have increased the uncertainty surrounding the outlook for
economic growth and inflation. The Committee will continue to assess
the effects of financial and other developments on economic prospects
and will act as needed to foster price stability and sustainable
Voting for the FOMC monetary policy action were: Ben S. Bernanke,
Chairman; Timothy F. Geithner, Vice Chairman; Charles L. Evans; Thomas
M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin;
William Poole; and Kevin M. Warsh. Voting against was Eric S.
Rosengren, who preferred to lower the target for the federal funds rate
by 50 basis points at this meeting.
In a related action, the Board of Governors unanimously approved a
25-basis-point decrease in the discount rate to 4-3/4 percent. In
taking this action, the Board approved the requests submitted by the
Boards of Directors of the Federal Reserve Banks of New York,
Philadelphia, Cleveland, Richmond, Atlanta, Chicago, and St. Louis.