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Monetary Policy

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The Federal Open Market Committee left the 5.5% intended federal funds rate unchanged at its December 21 meeting, citing the need for “a smooth transition into the Year 2000.” Although the FOMC adopted a symmetric directive, its press release expressed concern about persistent increases in demand that could eventually lead to inflationary imbalances, “even after taking account of the remarkable rise in productivity growth.” Because such imbalances could undermine the economy’s exemplary performance, the Committee noted that it “will assess additional information on the balance of supply and demand, and the possible need for adjustment in the stance of policy to contain inflationary pressures.”

Suggested citation: "Monetary Policy," Federal Reserve Bank of Cleveland, Economic Trends, no. 00-01, pp. 02-05, 01.01.2000.

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