"Since the last easing of monetary policy in July, inflation has been somewhat more favorable than anticipated, and this result, along with an associated moderation in inflation expectations, warrants a modest easing in monetary conditions."
This statement by Federal Reserve Chairman Greenspan accompanied the December 19 announcement that the Federal Open Market Committee (FOMC) had decided to lower the intended federal funds rate by 25 basis points, to 5.5%. It now seems likely that actual inflation in 1995, as measured by the Consumer Price Index, will end the year below the 3% to 3.5% range expected by the FOMC in July.
Suggested citation: “Monetary Policy,” Federal Reserve Bank of Cleveland, Economic Trends, no. 96-01, pp. 02-04, 01.01.1996.