Goldman: 4 Thoughts On Today's FOMC Announcement

Bernanke

Photo: Flickr/Medill DC

Just out from Goldman, commentary on the FOMC.This is a slimmed down version of their words.

The last point is the big one: The announcement was less negative than xpected.

  • The FOMC reduced its assessment of current growth in today’s post-meeting statement, saying that “the economic recovery is continuing at a moderate pace, though somewhat more slowly than the committee had expected”. At the April meeting, it had said simply that “the economic recovery is proceeding at a moderate pace”. It also became more pessimistic about labour market developments, saying these indicators “have been weaker than anticipated”.
  • The committee also revised its assessment of current inflation trends. It removed a phrase which said “measures of underlying inflation are still subdued”, and another that “measures of underlying inflation continue to be somewhat low”.
  • There were no substantive changes in policy-related language (though the statement included several innocuous rewrites). In particular, the statement included no hints about further easing.
  • The statement included many of the changes we expected. Relative to our expectations, the assessment of activity was slightly less negative (except the description of the labour market).

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