**MNI POLICY: Minimal Changes To FOMC Statement, Rates Unch>

--Five Things We Learned From The August 1 FOMC Statement

By Kevin Kastner, Sara Haire, Shikha Dave, and Harrison Clarke

     WASHINGTON (MNI) - The following are the key points from the 

FOMC statement released Wednesday:

     - As expected, the FOMC held the funds rate steady at 1.75% to 

2.00% on a 8-0 vote and made very few changes to the statement overall. 

The changes they did make indicated the economy is performing better 

than in June. There were no changes to the key phrases in the report.   

     - The statement from the FOMC upgraded their language in reference 

to economic activity, now saying it has been rising at a "strong rate," 

rather than a "solid rate." They also noted that household spending and 

business fixed investment have "grown strongly," which is partially an 

upgrade from June where they said household spending had only "picked 

up" while the strength in business fixed investment was not modified. 

     - The language regarding inflation was relatively unchanged, only 

acknowledging that both headline and core inflation "remain near 2%," 

rather than in the June statement where they said it had "moved close to 

2%." They repeated that "further gradual increases" will be consistent 

with their objectives, including having inflation remain "near the 

Committee's 2% objective over the medium term." 

     - The statement maintained that job gains "have been strong," but 

modified the language about the unemployment rate to say it has "stayed 

low" rather than the June statement where it said it "has declined." 

     - The FOMC maintained that they will continue to "assess realized 

and expected economic conditions" as they continue to forge forward in 

deciding on rate increases. They also repeated that the "stance of 

monetary policy remains accommodative." 

     ** MNI Washington Bureau: 202-371-2121 ** 

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