On February 13, the Board of Governors of the Federal Reserve System submitted its semiannual Monetary Policy Report to Congress, and Federal Reserve Chairman Alan Greenspan testified before the Senate Committee on Banking, Housing, and Urban Affairs. Chairman Greenspan expressed optimism about “the prospects for sustaining strong advances in productivity in the years ahead,” but also noted that “downside risks predominate” over a shorter horizon. Implied yields on federal funds futures did not react strongly to his testimony. Market participants continue to place a high probability on a further cut of 50 basis points in the federal funds rate by the end of March.
Suggested citation: "Monetary Policy," Federal Reserve Bank of Cleveland, Economic Trends, no. 01-03, pp. 04, 03.01.2001.