WASHINGTON (MNI) – The directors of the Federal Reserve Bank of
Boston again voted for a discount rate cut while the directors of the
Kansas City Bank kept their usual stance, requesting a rate increase,
the discount rate minutes showed Tuesday.
The Federal Reserve Board decided, however, to keep the rate
unchanged.
“Federal Reserve Bank directors noted continued improvement in
economic activity but remained cautious about the outlook, consistent
with their expectations of growth at a moderate pace over coming
quarters,” the minutes said.
The minutes said directors received mixed signals about the health
of the economy.
The minutes said the directors received generally positive reports
on consumer spending, and some observed increases in business capital
spending and manufacturing activity.
Housing remained a concern, and “many directors also pointed to
downside risks” which included the potential for rising energy costs
which could “temporarily” push up inflation and “still-significant
strains in global financial markets.”
“Against this backdrop, most directors recommended that the current
primary credit rate be maintained,” the minutes said.
The Board members also “considered the primary credit rate and
discussed, on a preliminary basis, their individual assessments of the
appropriate rate and its communication,” but ultimately, “No sentiment
was expressed for changing the primary credit rate before the
Committee’s meeting, and the existing rate was maintained.”
** MNI Washington Bureau: 202-371-2121 **
[TOPICS: M$U$$$,MMUFE$,MGU$$$,MFU$$$,MK$$$$]
