Fed Cuts Federal Funds Rate 25 Basis Points

Below is a sentence by sentence comparison of the last two press releases from the Federal Reserve announcing reductions to the Federal Funds rate.

Sentences preceded with [A] originate from the text of the March 18th, 2008, 75 basis point cut.

Sentences preceded with [B] originates from the text of the April 30th, 2008 25 basis point cut.

[A] Recent information indicates that the outlook for economic activity has weakened further.

[B] Recent information indicates that economic activity remains weak.

[A] Growth in consumer spending has slowed and labor markets have softened.

[B] Household and business spending has been subdued and labor markets have softened further.

[A] Financial markets remain under considerable stress, and the tightening of credit conditions and the deepening of the housing contraction are likely to weigh on economic growth over the next few quarters.

[B] Financial markets remain under considerable stress, and tight credit conditions and the deepening housing contraction are likely to weigh on economic growth over the next few quarters.

[A] Inflation has been elevated, and some indicators of inflation expectations have risen.

[B] Although readings on core inflation have improved somewhat, energy and other commodity prices have increased, and some indicators of inflation expectations have risen in recent months.

[A] The Committee expects inflation to moderate in coming quarters, reflecting a projected leveling-out of energy and other commodity prices and an easing of pressures on resource utilization.

[B] The Committee expects inflation to moderate in coming quarters, reflecting a projected leveling-out of energy and other commodity prices and an easing of pressures on resource utilization.

[A] Still, uncertainty about the inflation outlook has increased. It will be necessary to continue to monitor inflation developments carefully.

[B] Still, uncertainty about the inflation outlook remains high. It will be necessary to continue to monitor inflation developments carefully.

[A] Today’s policy action, combined with those taken earlier, including measures to foster market liquidity, should help to promote moderate growth over time and to mitigate the risks to economic activity.

[B] The substantial easing of monetary policy to date, combined with ongoing measures to foster market liquidity, should help to promote moderate growth over time and to mitigate risks to economic activity.

[A] However, downside risks to growth remain. The Committee will act in a timely manner as needed to promote sustainable economic growth and price stability.

[B] The Committee will continue to monitor economic and financial developments and will act as needed to promote sustainable economic growth and price stability.