Fed Leaves Federal Funds Rate At 1.25%

ByJohn S. McClenahen At the end of a five-day period during which the Bush Administration fired its Treasury Secretary, identified a new one, canned its White House economic coordinator and picked a new chairperson for the U.S. Securities & Exchange Commission, the Federal Open Market Committee did nothing. Chairman Alan Greenspan and his colleagues on the Federal Reserve's policy-making board are leaving the influential federal funds rate at 1.25%, a four-decade low. The panel, in unmistakable Greenspanese, says that recent economic indicators "are not inconsistent with the economy working its way through its current soft spot." Officially the FOMC is now in neutral, not noticeably worried about further weakening of the U.S. economy or nor particularly concerned that a sudden growth surge will set off a burst of inflation. The FOMC's next scheduled meeting is a two-day get-together on Jan. 28 and Jan. 29, 2003.