FOMC Statement: Old vs. New

Here’s a cool side-by-side comparision on the blog, Economist’s View, of the latest FOMC statement with the meeting before. It’s interesting to see how hardcore economists like to dissect these things. I’ve attempted a dissection myself. My comments are in blue.

June 29, 2006 Statement August 8, 2006 Statement
For immediate release

The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 5-1/4 percent.

We raising rates again yo.

For immediate release

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.

We gonna kick back and chill.

Recent indicators suggest that economic growth is moderating from its quite strong pace earlier this year, partly reflecting a gradual cooling of the housing market and the lagged effects of increases in interest rates and energy prices.

The economy trippin’. I’m tryin’ to sell my crib but nobody want to buy it. The gas I pay for my Bentley is hella expensive yo.

Economic growth has moderated from its quite strong pace earlier this year, partly reflecting a gradual cooling of the housing market and the lagged effects of increases in interest rates and energy prices.

The economy still trippin’. My crib still for sell and gas prices are still hella crazy ked.

Readings on core inflation have been elevated in recent months. Ongoing productivity gains have held down the rise in unit labor costs, and inflation expectations remain contained. However, the high levels of resource utilization and of the prices of energy and other commodities have the potential to sustain inflation pressures.

Say whaaat?!

Although the moderation in the growth of aggregate demand should help to limit inflation pressures over time, the Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information. In any event, the Committee will respond to changes in economic prospects as needed to support the attainment of its objectives.

Inflation gonna be contained cause folks be spending less.

Readings on core inflation have been elevated in recent months, and the high levels of resource utilization and of the prices of energy and other commodities have the potential to sustain inflation pressures.

Dam my gas bill high!

 

However, inflation pressures seem likely to moderate over time, reflecting contained inflation expectations and the cumulative effects of monetary policy actions and other factors restraining aggregate demand.

Nonetheless, the Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.

Inflation gonna be contained cause folks be spending less and past rate hikes still ain’t finish doin their thang.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Susan S. Bies; Jack Guynn; Donald L. Kohn; Randall S. Kroszner; Jeffrey M. Lacker; Sandra Pianalto; Kevin M. Warsh; and Janet L. Yellen.

Shout out to my homies, Ben Bernizzy fo shizzy, Tim "Git Yo Money" Geithner, Susan "I don’t take no" Bies, Jack "I be packin’ a big" Guynn, Donald "King" Kohn, Rand Krosnizo, J. Lack, Janet "I Be" Yellen.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Susan S. Bies; Jack Guynn; Donald L. Kohn; Randall S. Kroszner; Sandra Pianalto; Kevin M. Warsh; and Janet L. Yellen. Voting against was Jeffrey M. Lacker, who preferred an increase of 25 basis points in the federal funds rate target at this meeting.

Big ups to my Fed crew. We be holding it down! Buyakah!

In a related action, the Board of Governors unanimously approved a 25-basis-point increase in the discount rate to 6-1/4 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, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, and Dallas.

We jacked up the discount rate.

Not included

Peace out homies. Holla at yo boy!

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