logo
Fri, Feb 02, 2001 EST
fundsnav.gif (2552 bytes)
registration
account management
business home
home

Text of Fed Statement on Rate Cut
Associated Press
WASHINGTON — Here is the statement released by the Federal Reserve this afternoon:

The Federal Open Market Committee at its meeting today decided to lower its target for the federal funds rate by 50 basis points to 5-1/2 percent. In a related action, the Board of Governors approved a 50-basis-point reduction in the discount rate to 5 percent.

Consumer and business confidence has eroded further, exacerbated by rising energy costs that continue to drain consumer purchasing power and press on business profit margins. Partly as a consequence, retail sales and business spending on capital equipment have weakened appreciably. In response, manufacturing production has been cut back sharply, with new technologies appearing to have accelerated the response of production and demand to potential excesses in the stock of inventories and capital equipment.

Taken together, and with inflation contained, these circumstances have called for a rapid and forceful response of monetary policy. The longer-term advances in technology and accompanying gains in productivity, however, exhibit few signs of abating and these gains, along with the lower interest rates, should support growth of the economy over time.

Nonetheless, the Committee continues to believe that against the background of its long-run goals of price stability and sustainable economic growth and of the information currently available, the risks are weighted mainly toward conditions that may generate economic weakness in the foreseeable future.

In taking the discount rate action, the Federal Reserve Board approved requests submitted by the Boards of Directors of the Federal Reserve Banks of New York, Philadelphia, Cleveland, Atlanta, Chicago, St. Louis, Minneapolis, Dallas and San Francisco.

More Marketwire More MarketWire News Top of Page


© 2000, News Digital Media, Inc. d/b/a Fox News Online
All rights reserved. Fox News is a registered trademark of 20th Century Fox Film Corp.
Data from Thomson Financial Interactive is subject to the following Privacy Statement
© 2000 Associated Press. All rights reserved.
This material may not be published, broadcast, rewritten, or redistributed.
© 2000 Reuters Ltd. All rights reserved