Federal Open Market Committee at its meeting today decided to maintain the
existing stance of monetary policy, keeping its target for the federal
funds rate at 6-1/2 percent.
Recent data have indicated that the
expansion of aggregate demand is moderating toward a pace closer to the
rate of growth of the economy's potential to produce. The data also have
indicated that more rapid advances in productivity have been raising that
potential growth rate as well as containing costs and holding down
underlying price pressures.
Nonetheless, the Committee remains
concerned about the risk of a continuing gap between the growth of demand
and potential supply at a time when the utilization of the pool of
available workers remains at an unusually high level.
Against the background of its long-term
goals of price stability and sustainable economic growth and of the
information currently available, the Committee believes the risks continue
to be weighted mainly toward conditions that may generate heightened
inflation pressures in the foreseeable future.