FOMC Notes Lack Of Job Growth And Leaves Funds Rate Unchanged

By John S. McClenahen In a departure from their January pronouncement, Chairman Alan Greenspan and the other 11 voting members of the Federal Open Market Committee (FOMC) on March 16 publicly indicated the U.S. so far has been in a nearly jobless recovery from the 2001 recession. "Although job losses have slowed, new hiring has lagged," they observed in a statement released after Tuesday's meeting in Washington, D.C. "The probability of an unwelcome fall in inflation has diminished in recent months and now appears almost equal to that of a rise in inflation," the FOMC said. "With inflation quite low and resource use slack, the Committee believes that it can be patient in removing its policy accommodation." Accordingly, it left the target for the influential federal funds rate, the interest rate banks charge each other for overnight loans, at 1%, a 40-year low.

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