Fed holds key funds rate at 1%
January 29, 2004
Despite lowered risk of deflation, new hiring remains 'subdued'
The Federal Reserve's Open Market Committee decided today to keep its target for the federal funds rate at 1 percent.
The Fed said that the upside and downside risks to the attainment of sustainable growth for the next few quarters are roughly equal.
The Fed said that the probability of an unwelcome fall in inflation has diminished in recent months and now appears almost equal to that of a rise in inflation.
The evidence accumulated over the intermeeting period confirms that output is expanding briskly, according to the Fed. Although new hiring remains subdued, other indicators suggest an improvement in the labor market. Increases in core consumer prices are muted and expected to remain low.
With inflation quite low and resource use slack, the Fed believes that it can be patient in removing its policy accommodation.
Copyright: Inman News Features