Federal Open Market Committee Statement 06/29/06

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 5-1/4 percent.

Recent indicators suggest that economic growth is moderating from its quite strong pace earlier this year, partly reflecting a gradual cooling of the housing market and the lagged effects of increases in interest rates and energy prices.

Readings on core inflation have been elevated in recent months. Ongoing productivity gains have held down the rise in unit labor costs, and inflation expectations remain contained. However, the high levels of resource utilization and of the prices of energy and other commodities have the potential to sustain inflation pressures.

Although the moderation in the growth of aggregate demand should help to limit inflation pressures over time, the Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, 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; 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 6-1/4 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, and Dallas.

Release Date: June 29, 2006, For immediate release

2006 Monetary policy

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President to Visit Chancellor Angela Merkel Prior to G-8

Technorati Tags: President Bush and German Chancellor Merkel or Angela Merkel and Germany and Merkel and NATO or German

President Bush to Visit Chancellor Angela Merkel in East Germany Prior to G-8 Summit

Chancellor Angela Merkel of Germany, adjusts her earpiece as President George W. Bush begins his remarks during a joint press availability Friday, Jan. 13, 2006,

in the East Room of the White House. White House photo by Eric Draper.

At the invitation of Chancellor Angela Merkel, President Bush will travel to northeastern Germany in advance of his participation in the G-8 Summit in St. Petersburg, Russia. Chancellor Merkel will host President Bush on July 13, 2006 in the towns of Stralsund and Trinwillershagen, which are in the Chancellor's electoral constituency. The visit, which will take place in what had been communist East Germany, will underscore our two nations' commitment to advancing freedom and prosperity, and to strengthening the transatlantic partnership. The two leaders look forward to discussing a wide range of global challenges, in particular continuing their consultations on Iran and preparing for the G-8 Summit.

# # # For Immediate Release, Office of the Press Secretary, June 28, 2006

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