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Fed sees 'softness' as temporary
September 23, 2004
WASHINGTON (Reuters) - Federal Reserve officials
in August thought the period of late summer U.S. economic
softness was likely to be "short-lived," easing
the decision to raise interest rates, minutes released Thursday
show.
"Although the pace of economic growth
had moderated in the second quarter, the Committee believed
that the softness would prove short-lived and that the economy
was poised to resume a stronger rate of expansion going forward,"
according to the minutes of the Aug. 10 Federal Open Market
Committee meeting.
The Fed raised its key federal funds rate
by a quarter-percentage point at the meeting, with the members
noting that, given the rate's low level when judged against
inflation, "significant cumulative policy tightening
likely would be needed" to meet the Fed's goals of price
stability and economic growth.
The central bank raised its fed funds target
another quarter-point, to 1.75 percent, on Tuesday.
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