By Evelina M. Tainer, Chief Economist, Econoday
May 9, 2003

The FOMC voted unanimously to leave rates unchanged at their May 6 meeting but they did shift to an easing bias, citing disappointing economic reports and emphasizing a greater risk of deflation than inflation over the next few quarters. Jobless claims fell in the most recent week but remain stubbornly above 400,000. The ISM non-manufacturing survey showed improvement in April but stood just barely over the 50 percent mark (which signals economic expansion).

Stock prices are basically holding to the gains made last week, although bond prices soared after the FOMC shifted to an easing bias.