FOMC STATEMENTS: SIDE-BY-SIDE

June 23 Text
August 10 Text
Information received since the Federal
Information received since the Federal Open Market Committee met in April suggests
Open Market Committee met in June indicates that the economic recovery is proceeding and
that the pace of recovery in output and that the labor market is improving gradually.
employment has slowed in recent months. Household spending is increasing but remains
Household spending is increasing gradually, constrained by high unemployment, modest
but remains constrained by high unemployment, income growth, lower housing wealth, and tight
modest income growth, lower housing wealth, credit. Business spending on equipment and
and tight credit. Business spending on software has risen significantly; however,
equipment and software is rising; however, investment in nonresidential structures
investment in nonresidential structures continues to be weak and employers remain
continues to be weak and employers remain reluctant to add to payrolls. Housing starts
reluctant to add to payrolls. Housing starts remain at a depressed level. Financial
remain at a depressed level. Bank lending has conditions have become less supportive of
continued to contract. Nonetheless, the economic growth on balance, largely reflecting
Committee anticipates a gradual return to developments abroad. Bank lending has
higher levels of resource utilization in a continued to contract in recent months.
context of price stability, although the pace Nonetheless, the Committee anticipates a
of economic recovery is likely to be more gradual return to higher levels of resource
modest in the near term than had been utilization in a context of price stability,
anticipated. although the pace of economic recovery is
likely to be moderate for a time.
Measures of underlying inflation have
trended lower in recent quarters and, with Prices of energy and other commodities
substantial resource slack continuing to have declined somewhat in recent months, and
restrain cost pressures and longer-term underlying inflation has trended lower. With
inflation expectations stable, inflation is substantial resource slack continuing to
likely to be subdued for some time. restrain cost pressures and longer-term
inflation expectations stable, inflation is
The Committee will maintain the target likely to be subdued for some time.
range for the federal funds rate at 0 to 1/4
percent and continues to anticipate that The Committee will maintain the target
economic conditions, including low rates of range for the federal funds rate at 0 to 1/4
resource utilization, subdued inflation percent and continues to anticipate that
trends, and stable inflation expectations, are economic conditions, including low rates of
likely to warrant exceptionally low levels of resource utilization, subdued inflation
the federal funds rate for an extended period. trends, and stable inflation expectations, are
likely to warrant exceptionally low levels of
To help support the economic recovery in the federal funds rate for an extended period.
a context of price stability, the Committee
will keep constant the Federal Reserve's The Committee will continue to monitor the
holdings of securities at the current level by economic outlook and financial developments
reinvesting principal payments from agency and will employ its policy tools as necessary
debt and agency mortgage-backed securities in to promote economic recovery and price
longer-term Treasury securities. (1) The stability.
Committee will continue to roll over the
Federal Reserve's holdings of Treasury Voting for the FOMC monetary policy action
securities as they mature. were: Ben S. Bernanke, Chairman; William C.
Dudley, Vice Chairman; James Bullard;
The Committee will continue to monitor Elizabeth A. Duke; Donald L. Kohn; Sandra
the economic outlook and financial Pianalto; Eric S. Rosengren; Daniel K.
developments and will employ its policy tools Tarullo; and Kevin M. Warsh. Voting against
as necessary to promote economic recovery and the policy action was Thomas M. Hoenig, who
price stability. believed that continuing to express the
expectation of exceptionally low levels of the
Voting for the FOMC monetary policy federal funds rate for an extended period was
action were: Ben S. Bernanke, Chairman; no longer warranted because it could lead to a
William C. Dudley, Vice Chairman; James build-up of future imbalances and increase
Bullard; Elizabeth A. Duke; Donald L. Kohn; risks to longer-run macroeconomic and
Sandra Pianalto; Eric S. Rosengren; Daniel K. financial stability, while limiting the
Tarul1o; and Kevin M. Warsh. Committee's flexibility to begin raising rates
Voting against the policy action was modestly.
Thomas M. Hoenig, who judged that the economy
is recovering modestly, as projected.
Accordingly, he believed that continuing to
express the expectation of exceptionally low
levels of the federal funds rate for an
extended period was no longer warranted and
limits the Committee's ability to adjust
policy when needed. In addition, given
economic and financial conditions, Mr. Hoenig
did not believe that keeping constant the size
of the Federal Reserve's holdings of longer-
term securities at their current level was
required to support a return to the
Committee's policy objectives.

(1) The Open Market Desk will issue a