Fed Panel Made No Change In Monetary Policy in August
Federal Reserve policymakers made no change in monetary policy when they met in August but agreed that economic developments might call for a small cut in interest rates, according to a Fed report on the meeting released yesterday.</br></br>Members of the policymaking group, the Federal Open Market Committee, or FOMC, generally expected the economy to continue growing moderately into next year, the report said.</br></br>If the forecast of moderate growth turned out to be wrong, however, there was disagreement over whether the likelihood was that the economy would be weaker or stronger than expected.</br></br>Some of members felt the risks "were about evenly balanced or were tilted toward some strengthening in the months ahead; several others saw some weakening as the most likely prospect, or at least the one that had to be guarded against because of the broad economic and social consequences of a downturn in economic activity," the policy record said.</br></br>In the end, the committee agreed on a policy indicating that, depending upon economic developments, the Fed should more readily ease policy than tighten it during the period between the Aug. 22 meeting and the next FOMC session, which was held Tuesday.