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Release Date: August 7, 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.
Economic growth was moderate during the first half of the year. Financial markets have been
volatile in recent weeks, credit conditions have become tighter for some households and businesses,
and the housing correction is ongoing. Nevertheless, the economy seems likely to continue to
expand at a moderate pace over coming quarters, supported by solid growth in employment and
incomes and a robust global economy.
Readings on core inflation have improved modestly in recent months. However, a sustained
moderation in inflation pressures has yet to be convincingly demonstrated. Moreover, the high level
of resource utilization has the potential to sustain those pressures.
Although the downside risks to growth have increased somewhat, the Committee's predominant
policy concern remains the risk that inflation will fail to moderate as expected. Future policy
adjustments will depend on the outlook for both inflation and economic growth, as implied by
incoming information.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F.
Geithner, Vice Chairman; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Frederic S.
Mishkin; Michael H. Moskow; William Poole; Eric Rosengren; and Kevin M. Warsh.