In a statement, the Federal Open Market Committee (FOMC)acknowledges these pressures and then urged the market to wait forits earlier rate cuts to take affect. "Strains in financial marketshave increased significantly and labor markets have weakenedfurther," the FOMC says. "Economic growth appears to have slowedrecently, partly reflecting a softening of household spending.Tight credit conditions, the ongoing housing contraction, and someslowing in export growth are likely to weigh on economic growthover the next few quarters." But over time, says the FOMC, "thesubstantial easing of monetary policy, combined with ongoingmeasures to foster market liquidity, should help to promotemoderate economic growth."
Inflation's uncertain outlook was one reason for the committee'sdecision, even though it does expect inflation to moderate laterthis year and next, as Federal Reserve chairman Ben Bernanke saidin a speech in August.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
