The Federal Open Market Committee decided today to keep its target for the
federal funds rate at 2 percent.

Strains in financial markets have increased significantly and labor markets
have weakened further. Economic growth appears to have slowed recently,
partly reflecting a softening of household spending. Tight credit conditions
, the ongoing housing contraction, and some slowing in export growth are
likely to weigh on economic growth over the next few quarters. Over time,
the substantial easing of monetary policy, combined with ongoing measures to
foster market liquidity, should help to promote moderate economic growth.

Inflation has been high, spurred by the earlier increases in the prices of
energy and some other commodities. The Committee expects inflation to
moderate later this year and next year, but the inflation outlook remains
highly uncertain.

The downside risks to growth and the upside risks to inflation are both of
significant concern to the Committee. The Committee will monitor economic
and financial developments carefully and will act as needed to promote
sustainable economic growth and price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman;
Christine M. Cumming; Elizabeth A. Duke; Richard W. Fisher; Donald L. Kohn;
Randall S. Kroszner; Sandra Pianalto; Charles I. Plosser; Gary H. Stern; and
Kevin M. Warsh. Ms. Cumming voted as the alternate for Timothy F. Geithner.
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