Federal Open Market Committee Statement 05/10/06

Technorati Tags: President Bush and Dr. Ben S. Bernanke or Ben S. Bernanke and Ben Bernanke or Bernanke and Federal Reserve or Chairman of the Federal Reserve and Monetary policy or Federal Open Market Committee and federal funds rate

The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 5 percent.

Economic growth has been quite strong so far this year. The Committee sees growth as likely to moderate to a more sustainable pace, partly reflecting a gradual cooling of the housing market and the lagged effects of increases in interest rates and energy prices.

As yet, the run-up in the prices of energy and other commodities appears to have had only a modest effect on core inflation, ongoing productivity gains have helped to hold the growth of unit labor costs in check, and inflation expectations remain contained. Still, possible increases in resource utilization, in combination with the elevated prices of energy and other commodities, have the potential to add to inflation pressures.

The Committee judges that some further policy firming may yet be needed to address inflation risks but emphasizes that the extent and timing of any such firming will depend importantly on the evolution of the economic outlook as implied by incoming information. In any event, the Committee will respond to changes in economic prospects as needed to support the attainment of its objectives.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Susan S. Bies; Jack Guynn; Donald L. Kohn; Randall S. Kroszner; Jeffrey M. Lacker; Mark W. Olson; Sandra Pianalto; Kevin M. Warsh; and Janet L. Yellen.

In a related action, the Board of Governors unanimously approved a 25-basis-point increase in the discount rate to 6 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Dallas, and San Francisco.

2006 Monetary policy, Release Date: May 10, 2006, For immediate release

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Secretary Rice, EU Secretary General Javier Solana on Iran, VIDEO, PODCAST, TEXT

Technorati Tags: State Department and Secretary of State or Javier Solana and European Union, or Iran and EU or Condoleezza Rice, or UN and Security Council,

Remarks With Javier Solana, Secretary General of the Council of the European Union and High Representative for the Common Foreign and Security Policy Before Their Meeting. VIDEO, file is windows media format, running time is 1:03, PODCAST, file is mp3 format for podcast, running time is 1:03

Secretary Condoleezza Rice, Washington, DC, May 10, 2006, (11:00 a.m. EST)

Secretary Rice speaks with His Excellency Javier Solana, Secretary General of the Council of the European Union and High Representative for the Common Foreign and Security Policy.

State Department photo by Michael Gross. Washington, DC, May 10, 2006.

SECRETARY RICE: Hello, everyone.

QUESTION: Good morning. Mr. Solana, will there be new incentives to turn Iran around? (Inaudible) -- it looks like we've had a disaster.

SECRETARY GENERAL SOLANA: We have (inaudible) with a lot of intelligence and a lot of cooperation.

QUESTION: Will you be ready by Monday?

SECRETARY GENERAL SOLANA: I don't think that by Monday because today's --

QUESTION: Monday in Brussels.

SECRETARY GENERAL SOLANA: Monday, in fact, we will talk about, but it will not be finalized (inaudible).

SECRETARY RICE: Barry, let me just note, of course the other part of this is that we will have Security Council action and the issue is to make certain that Iran knows that there are two options that have been there all along, which is that they can have a civil nuclear program that is appropriate and that the international community supports or they can face isolation. And there will be Security Council action. We felt that two weeks to continue to try to work for Council unity was well worth it.

QUESTION: Thank you.

2006/480 Released on May 10, 2006

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