Reading between the lines at the Fed

Robert J. Terry//June 23, 2010//

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The Associated Press has helpfully compiled a comparison of the Federal Reserve’s statements on the economy and its policy positions from its last regular meeting on April 27-28 and the meeting that wrapped up Wednesday.

Acolytes of both John Maynard Keynes and Milton Friedman have plenty to chew on here. The big “uh oh,” and the one making news today, is in the first batch of quotes. Tell us what you think and how this is impacting your business, in the Comments section below.

FINANCIAL MARKETS
April: “While bank lending continues to contract, financial market conditions remain supportive of economic growth.”
June: “Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad.”

LABOR MARKETS
April: “The labor market is beginning to improve.”
June: “The labor market is improving gradually.”

ECONOMIC CONDITIONS
April: “Growth in household spending has picked up recently but remains constrained by high unemployment, modest income growth, lower housing wealth and tight credit.”
June: “Household spending is increasing but remains constrained by high unemployment, modest income growth, lower housing wealth and tighter credit.”

INTEREST RATES
April: Leaves federal funds rate unchanged at a record low of zero to 0.25 percent, where it has been since December 2008, and repeats pledge to keep rates “exceptionally low” for “an extended period.”
June: Leaves federal funds rate unchanged and once again repeats pledge to keep rates “exceptionally low” for “an extended period.”