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Enviado: 25/10/2006 19:37risks remain, inflation likely moderate, tight bias
é, não é, talvez sim ou não.... incerteza oh yé... isto quer dar molho
2:15 PM ET 10/25/06 STOCKS TICK SLIGHTLY HIGHER AFTER FOMC DECISION
2:13 PM ET 10/25/06 FED REPEATS INFLATION PRESSURES LIKELY TO MODERATE
2:13 PM ET 10/25/06 FED SAYS ECONOMY LIKELY TO EXPAND AT MODERATE PACE
2:13 PM ET 10/25/06 LACKER DISSENTED IN FAVOR OF RATE HIKE
2:13 PM ET 10/25/06 RICHMOND FED'S LACKER DISSENTS FOR THIRD STRAIGHT MEETING
2:13 PM ET 10/25/06 FOMC POLICY STATEMENT ONLY TWEAKS WORDING OF LAST STATEMENT
2:13 PM ET 10/25/06 FOMC SAYS INFLATION RISKS REMAIN
2:13 PM ET 10/25/06 FOMC MAINTAINS INFORMAL TIGHTENING BIAS
2:13 PM ET 10/25/06 FOMC HOLDS RATES STEADY
2:14 PM ET 10/25/06 FED REMOVES ENERGY PRICES AS RISK OF INFLATION
Fed holds rates steady, maintains inflation warning
By Greg Robb, MarketWatch Last Update: 2:14 PM ET Oct 25, 2006
WASHINGTON (MarketWatch) - The Federal Reserve decided to remain on the sidelines Wednesday, but continued to leave the door open for further increases if inflation does not behave.
The Federal Open Market Committee voted to hold overnight interest rates steady at 5.25%.
This was the third straight meeting with no change in monetary policy. It follows rate hikes at an unprecedented 17 consecutive policy-setting meetings.
The announcement from the FOMC was little changed from the September statement.
"Economic growth has slowed over the course of the year, partly reflecting a cooling of the housing market," the statement said. "Going forward, the economy seems likely to expand at a moderate pace."
"Nonetheless, the committee judges that some inflation risks remain," the statement said. Further rate hikes, if any, would depend on "the evolution of the outlook for both inflation and economic growth."
Fed officials are waiting to see whether the slowdown in the housing and auto sectors in the third quarter spills into other sectors in coming months or whether the economy rebounds, thereby putting renewed pressures on consumer price inflation, which remains quite high.
Economists said growth in the third quarter may have weakened to about a 2.0% annual rate, the slowest quarterly growth rate since the first quarter of 2003.
On the other hand, core consumer price inflation rose to a 2.9% year-over-year rate in September, the highest rate in a decade.
The FOMC said it expects inflationary pressures to moderate gradually as the economy slows, but Fed officials see risks on both sides of the outlook.
The decision to remain on the sidelines was no surprise. Ahead of time, economists were in agreement that the FOMC would extend its "pause" to allow more time to assess the likely direction of the economy.
The vote was 10-1.
Richmond Fed President Jeffrey Lacker dissented for the third straight meeting, voting to raise rates by a quarter of a percentage point. Lacker has said inflation remains too high.
The Fed targets overnight lending rates to loosely control inflation via their impact on economic activity. Higher rates cool the economy, reducing inflationary pressures over time as demand slows. Lower rates can boost demand.
Banks typically peg their prime lending rates to the federal funds rate. Credit-card rates and adjustable-trade mortgages are sometimes also tied directly to the Fed target.
At the moment, Fed officials expect a "soft landing," with growth slowing but not contracting. This moderate growth pace will be enough to ease inflationary pressures, they say.
But economists see the FOMC divided between "hawks" who are concerned that the slowdown won't be sharp enough to bring inflation down meaningfully and "doves" who are more worried about a possible sharp slowdown in demand.
Financial markets are currently pricing in one or two rate cuts in 2007.
Fed Vice Chairman Donald Kohn said recently there were "fairly sizable" uncertainties about the likely direction of interest rates in coming months, and said he was surprised that the financial markets didn't share his sense.
é, não é, talvez sim ou não.... incerteza oh yé... isto quer dar molho
2:15 PM ET 10/25/06 STOCKS TICK SLIGHTLY HIGHER AFTER FOMC DECISION
2:13 PM ET 10/25/06 FED REPEATS INFLATION PRESSURES LIKELY TO MODERATE
2:13 PM ET 10/25/06 FED SAYS ECONOMY LIKELY TO EXPAND AT MODERATE PACE
2:13 PM ET 10/25/06 LACKER DISSENTED IN FAVOR OF RATE HIKE
2:13 PM ET 10/25/06 RICHMOND FED'S LACKER DISSENTS FOR THIRD STRAIGHT MEETING
2:13 PM ET 10/25/06 FOMC POLICY STATEMENT ONLY TWEAKS WORDING OF LAST STATEMENT
2:13 PM ET 10/25/06 FOMC SAYS INFLATION RISKS REMAIN
2:13 PM ET 10/25/06 FOMC MAINTAINS INFORMAL TIGHTENING BIAS
2:13 PM ET 10/25/06 FOMC HOLDS RATES STEADY
2:14 PM ET 10/25/06 FED REMOVES ENERGY PRICES AS RISK OF INFLATION
Fed holds rates steady, maintains inflation warning
By Greg Robb, MarketWatch Last Update: 2:14 PM ET Oct 25, 2006
WASHINGTON (MarketWatch) - The Federal Reserve decided to remain on the sidelines Wednesday, but continued to leave the door open for further increases if inflation does not behave.
The Federal Open Market Committee voted to hold overnight interest rates steady at 5.25%.
This was the third straight meeting with no change in monetary policy. It follows rate hikes at an unprecedented 17 consecutive policy-setting meetings.
The announcement from the FOMC was little changed from the September statement.
"Economic growth has slowed over the course of the year, partly reflecting a cooling of the housing market," the statement said. "Going forward, the economy seems likely to expand at a moderate pace."
"Nonetheless, the committee judges that some inflation risks remain," the statement said. Further rate hikes, if any, would depend on "the evolution of the outlook for both inflation and economic growth."
Fed officials are waiting to see whether the slowdown in the housing and auto sectors in the third quarter spills into other sectors in coming months or whether the economy rebounds, thereby putting renewed pressures on consumer price inflation, which remains quite high.
Economists said growth in the third quarter may have weakened to about a 2.0% annual rate, the slowest quarterly growth rate since the first quarter of 2003.
On the other hand, core consumer price inflation rose to a 2.9% year-over-year rate in September, the highest rate in a decade.
The FOMC said it expects inflationary pressures to moderate gradually as the economy slows, but Fed officials see risks on both sides of the outlook.
The decision to remain on the sidelines was no surprise. Ahead of time, economists were in agreement that the FOMC would extend its "pause" to allow more time to assess the likely direction of the economy.
The vote was 10-1.
Richmond Fed President Jeffrey Lacker dissented for the third straight meeting, voting to raise rates by a quarter of a percentage point. Lacker has said inflation remains too high.
The Fed targets overnight lending rates to loosely control inflation via their impact on economic activity. Higher rates cool the economy, reducing inflationary pressures over time as demand slows. Lower rates can boost demand.
Banks typically peg their prime lending rates to the federal funds rate. Credit-card rates and adjustable-trade mortgages are sometimes also tied directly to the Fed target.
At the moment, Fed officials expect a "soft landing," with growth slowing but not contracting. This moderate growth pace will be enough to ease inflationary pressures, they say.
But economists see the FOMC divided between "hawks" who are concerned that the slowdown won't be sharp enough to bring inflation down meaningfully and "doves" who are more worried about a possible sharp slowdown in demand.
Financial markets are currently pricing in one or two rate cuts in 2007.
Fed Vice Chairman Donald Kohn said recently there were "fairly sizable" uncertainties about the likely direction of interest rates in coming months, and said he was surprised that the financial markets didn't share his sense.
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