At its August 13 meeting, the Federal Open Market Committee left the target federal funds rate unchanged, although it altered the balance-of-risk statement “towards conditions that may generate economic weakness.” The federal funds futures market now has built in a strong possibility of lower rates. With implied yields reaching a minimum of 1.59% in February 2003, the market seems quite confident of a 25 basis point cut by early next year.
Suggested citation: "Monetary Policy," Federal Reserve Bank of Cleveland, Economic Trends, no. 02-09, pp. 04, 09.01.2002.