I mean, word for word identical to the March 21 statement (except the date). At that time changes in the Fed's wording created quite a bit of confusion - did they change their bias? Are they moving towards an ease? If you look at the March 21 statement you can make a case for keeping it unchanged. The wording is vague enough that it still applies now. Sure, they could note that employment growth has slowed but that would leave markets expecting an imminent rate cut. Also the easiest way for the Fed to create the least amount of controversy would be to leave it unchanged. Here is the March 21 statement. What, if anything, would you change?
you found it.. this is going to be the same statement from the last meeting: notice the date, Release Date: May 9, 2007 For immediate release The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent. Recent indicators have been mixed and the adjustment in the housing sector is ongoing. Nevertheless, the economy seems likely to continue to expand at a moderate pace over coming quarters. Recent readings on core inflation have been somewhat elevated. Although inflation pressures seem likely to moderate over time, the high level of resource utilization has the potential to sustain those pressures. In these circumstances, the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected. Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.
An unchanged fed funds rate is certainly expected, but I think many analysts are looking for some subtle changes in the text, especially after the confusion created by the March statement. for example, May 9 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke may today seek a clearer signal on interest rates after confusing investors with the central bank's last policy statement.
I think the statement will emphasize that NO ACTION will be taken until the data says otherwise. Right now, the market is doing his job. There is just enough fear of a slowing economy to chill any thought of hiking rates.
Why is the FED meeting always it seems 1-2 days before jobless claims, PPI, CPI, etc. I assume they already have this data in one form or another, but why not wait until after these reports come out? I mean, why not in effect say, "we see what you see, and here is what we think." Instead, we get the FED announcement, then have to wait a couple of days to see if it jibs with the latest econo data.
they have been finding reasons to rally this market after Fed meetings for awhile. I would be surprised if it doesn't happen today. It works until it doesn't work anymore kind of trade.
right now the dow is up a point and the nasdaq down 10 this could be the best buying opportunity ahead of the 2:15pm statement!!!! :eek: