Federal Reserve Stands Pat
|January 31, 2002|
Open Market Committee Decides To Keep Short-Term Rates At 1.75 Percent
Inman News Features
The Federal Reserve Board?s Open Market Committee decided today to keep its target for the federal funds rate unchanged at 1.75 percent, sending financial markets higher.
The more symbolic discount rate, which the Fed charges banks for overnight loans, will stay at 1.25.
In releasing its decision, the committee stated:
"Signs that weakness in demand is abating and economic activity is beginning to firm have become more prevalent. With the forces restraining the economy starting to diminish, and with the long-term prospects for productivity growth remaining favorable and monetary policy accommodative, the outlook for economic recovery has become more promising . . ."
The committee had made 11 rate cuts totaling 4.75 percentage points over the past 13 months.
The Dow Jones Industrials jumped on the news, moving up 108 points after opening lower. The Nasdaq Composite was higher, up 15 points, near the end of the trading session.
Copyright: Inman News Service