Fed raises rates: official statement

[notiCIas]

Fed raises rates: official statement

Central bankers raise fed funds rate a quarter point for 11th straight session to 3.75 percent.

September 20, 2005: 3:45 PM EDT

NEW YORK (CNN/Money) - The Federal Reserve Tuesday raised its short-term rate target by a quarter point to 3.75 percent, its 11th straight quarter-point rate hike. The following is the statement accompanying the central bank's decision:

The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 3-3/4 percent.

Output appeared poised to continue growing at a good pace before the tragic toll of Hurricane Katrina. The widespread devastation in the Gulf region, the associated dislocation of economic activity, and the boost to energy prices imply that spending, production, and employment will be set back in the near term. In addition to elevating premiums for some energy products, the disruption to the production and refining infrastructure may add to energy price volatility.

While these unfortunate developments have increased uncertainty about near-term economic performance, it is the Committee's view that they do not pose a more persistent threat. Rather, monetary policy accommodation, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity. Higher energy and other costs have the potential to add to inflation pressures. However, core inflation has been relatively low in recent months and longer-term inflation expectations remain contained.

The Committee perceives that, with appropriate monetary policy action, the upside and downside risks to the attainment of both sustainable growth and price stability should be kept roughly equal. With underlying inflation expected to be contained, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured. Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability.

Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman; Timothy F. Geithner, Vice Chairman; Susan S. Bies; Roger W. Ferguson, Jr.; Richard W. Fisher; Donald L. Kohn; Michael H. Moskow; Anthony M. Santomero; and Gary H. Stern. Voting against was Mark W. Olson, who preferred no change in the federal funds rate target at this meeting.

In a related action, the Board of Governors unanimously approved a 25-basis-point increase in the discount rate to 4-3/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Richmond, Chicago, Minneapolis, and Kansas City.

[Sol Dado]

Rather, monetary policy accommodation, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity. Higher energy and other costs have the potential to add to inflation pressures. However, core inflation has been relatively low in recent months and longer-term inflation expectations remain contained.

Esta notícia parece-me muito boa para manter as expectativas altas em termos de subidas nos mercados financeiros.

No entanto, a multidão de investidores não gostou do aumento dos juros. Penso que a multidão se tinha convencido que, com as catástrofes que assolaram os USA e com as subidas do preço da gasolina, o FED iria fazer uma pausa no aumento gradual e sistemático da taxa de juro. Eu próprio estava convencido que desta vez o FED iria manter a taxa...para dar um pequeno estímulo.

Mas afinal o FED entende que a economia está muito forte e que, se não põe travões, isto ainda pode entrar numa espiral inflacionista incontrolável!

Ora bem, o que é certo é que a multidão ficou momentaneamente chateada e pouco confiante. A questão agora é saber se esta perturbação psicológica é passageira ou se ainda será necessário corrigir mais uns dias...

Por outro lado, sempre ouvi dizer que num Bull Market as más notícias são boas para manter o mercado a subir.

Indiferente a tudo está o Nikkei!