For immediate release
The Federal Open Market Committee decided today to lower its target for the federal funds rate 25 basis points to 2 percent.
Recent information indicates that economic activity remains weak. Household and business spending has been subdued and labor markets have softened further. Financial markets remain under considerable stress, and tight credit conditions and the deepening housing contraction are likely to weigh on economic growth over the next few quarters.
Although readings on core inflation have improved somewhat, energy and other commodity prices have increased, and some indicators of inflation expectations have risen in recent months. The Committee expects inflation to moderate in coming quarters, reflecting a projected leveling-out of energy and other commodity prices and an easing of pressures on resource utilization. Still, uncertainty about the inflation outlook remains high. It will be necessary to continue to monitor inflation developments carefully.
The substantial easing of monetary policy to date, combined with ongoing measures to foster market liquidity, should help to promote moderate growth over time and to mitigate risks to economic activity. The Committee will continue to monitor economic and financial developments and will act as needed to promote sustainable economic growth and price stability.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; Sandra Pianalto; Gary H. Stern; and Kevin M. Warsh. Voting against were Richard W. Fisher and Charles I. Plosser, who preferred no change in the target for the federal funds rate at this meeting.
In a related action, the Board of Governors unanimously approved a 25-basis-point decrease in the discount rate to 2-1/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of New York, Cleveland, Atlanta, and San Francisco.
The Committee expects inflation to moderate in coming quarters, reflecting a projected leveling-out of energy and other commodity prices and an easing of pressures on resource utilization. Still, uncertainty about the inflation outlook remains high. It will be necessary to continue to monitor inflation developments carefully.
The substantial easing of monetary policy to date, combined with ongoing measures to foster market liquidity, should help to promote moderate growth over time and to mitigate risks to economic activity. The Committee will continue to monitor economic and financial developments and will act as needed to promote sustainable economic growth and price stability.
What the Fed did today is exactly what I expected him to do. Remember that when they reference any report, that report has been rigged to suit there purposes. You can never be too cynical in my opinion. Basically the dollar will continue to weaken and gas prices will soar because of the weaking dollar, just like what has happened in the last couple of months. If you don't think that inflation has been going crazy, just go to the grocery store and ask yourself if you get as much as you did 1 month ago for $100. In my opinion we still have some hard days ahead in the economy and the recession will take a year or more to recover from. Look at the Japanese economy in the late 90's if you would like to see an example of what we are going through.
People aren't happy with the fed meeting because they did exatly what they thought they would do and the initial hoopla is over and I think people will start to realize that earning season has sucked and the market will start to collapse on itself in the near future. At least that is what I betting on anyways. I am showing a list of my recent short plays this month. As you can see, I haven't been doing well this month and I have lost $418. This really isn't that bad since the market has been moving against me. I was going to add to the XLY,XLF,XLB,and XLK positions today but the market isn't letting me. I think that the USO,DBA,GLD, and SLV are all good plays, and they have just pulled back, but make sure to use a stop loss for protection.
FOMC release
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