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Fed - nix neues im westen

Startbeitrag von Apollyon am 31.01.2007 19:17

Fed Leaves Main Interest Rate at 5.25%, Restates Inflation Risk

By Scott Lanman

Jan. 31 (Bloomberg) -- The Federal Reserve kept the benchmark U.S. interest rate at 5.25 percent and said it's still leaning toward tightening credit if needed to reduce inflation.

``Some inflation risks remain,'' the Federal Open Market Committee said today after meeting in Washington. ``The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.''

Ben S. Bernanke, ending his first year as chairman, is keeping his guard up against inflation while avoiding a rate increase that may hurt the economy. Hours before the Fed's decision, a government report showed economic growth picked up last quarter from a slowdown. Other figures showed manufacturing and construction still struggling.

``Recent indicators have suggested somewhat firmer economic growth, and some tentative signs of stabilization have appeared in the housing market,'' the Fed said. ``Overall, the economy seems likely to expand at a moderate pace over coming quarters.''

Today's 11-0 vote extends the Fed's period of inactivity to seven months, the longest stretch without a change since June 2004, when the Fed ended a yearlong freeze at 1 percent. Policy makers are counting on the economy slowing enough to reduce inflation.

``Readings on core inflation have improved modestly in recent months, and inflation pressures seem likely to moderate over time,'' the Fed said. ``However, the high level of resource utilization has the potential to sustain inflation pressures.''

The Fed's preferred inflation gauge, which excludes food and energy costs, rose at a 2.1 percent annual pace in the fourth quarter, the Commerce Department said today. It's the fifth straight period the measure has exceeded 2 percent, the upper end of the comfort range articulated by Bernanke and other Fed officials. The gauge rose at a 2.2 percent pace in the third quarter.

Unanimous Decision

The vote was unanimous for the first time since June, the last meeting at which the Fed lifted borrowing costs. Richmond Fed President Jeffrey Lacker, who dissented at the past four meetings in favor of higher rates, rotated out of his voting slot and was replaced by the Boston Fed's Cathy Minehan, who has always sided with the majority.

Other regional Fed presidents who vote this year include Michael Moskow of Chicago and Thomas Hoenig of Kansas City. The St. Louis Fed's William Poole joined the committee in October after the Atlanta Fed's Jack Guynn retired. The Washington-based Board of Governors and New York Fed president always vote.


The consistency with the statement from the prior meeting contrasts with some forecasts at that time, when indications of a potentially deeper slowdown raised the possibility that the Fed could drop its bias toward tighter credit. At the last gathering, several FOMC members saw increased risks of slower economic growth, according to meeting minutes.

Since then, economic reports showing job gains, consumer spending, signs of stabilization in the housing market and a narrower trade deficit have all but erased that possibility.

``If inflation news continued to improve, there's a chance that over time they might move to a more neutral bias, even if labor markets remain tight,'' Bruce Kasman, chief economist at JPMorgan Chase & Co. in New York, said before the decision. ``But it's going to take time, with a number of good inflation reports, to actually move them in that direction.''

Investors are increasingly coming around to that view. Traders see little chance of a Fed interest-rate cut by the end of August. At the start of December, the contracts reflected an almost-certain cut by the end of March.

Fed members, as part of an ongoing discussion on how much information to disclose publicly, were scheduled this week to ``consider the role that economic projections and forecasts can play in communicating information,'' the Dec. 12 minutes said.

Extending Expansion

The Commerce Department confirmed the economic trend today, giving its initial estimate that fourth-quarter gross domestic product expanded at a 3.5 percent annual pace, compared with 2 percent in the third quarter and 2.6 percent in April to June.

Policy makers who spoke this month gave little indication they were ready to adjust borrowing costs. San Francisco Fed President Janet Yellen said Jan. 17 that the stance was ``well- positioned'' to bring down inflation without hurting growth; Poole used the same phrase in a press conference that day.

``It will still take some additional time for inflation to unwind due to lags between policy actions and their impacts on economic activity and inflation,'' Yellen said in a speech in Scottsdale, Arizona, which she repeated five days later in Nevada.

Fed Vice Chairman Donald Kohn said in a Jan. 8 speech that ``despite the recent favorable price data, I believe it is still too early to relax our concerns about whether the run-up in price pressures in the spring and summer of last year is truly unwinding and whether it is unwinding rapidly enough to forestall a pickup in inflation expectations.''

Such language, along with recent economic figures, have some analysts speculating the Fed may raise -- not lower -- borrowing costs.

``I don't think we're going to make a lot of progress on inflation,'' said former Fed governor Lyle Gramley, who is now a senior economic adviser at Stanford Washington Research Group in Washington. ``The Fed's next move is more likely to be up than down.'' He spoke before the rate decision.

To contact the reporter on this story: Scott Lanman in Washington at slanman@bloomberg.net .


Dow dampft los, nordwärts ;-)

von Hama - am 31.01.2007 20:07
KZ 13 K+ :confused:

von sommy - am 31.01.2007 22:15
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