By Evelina M. Tainer, Chief Economist, Econoday
May 10, 2002

To no one's surprise, the FOMC announced they would leave the federal funds rate target unchanged at 1.75 percent and keep the neutral bias they put in place at the mid-March meeting. Basically, Fed officials see that the economic recovery has begun though growth is mild by historical standards. This isn't a surprise to Greenspan & Company nor economists who had been predicting for a long time that the 2002 recovery would be modest. Many economists, along with bond and equity investors, are now coming to the conclusion that the Fed is unlikely to raise the federal funds rate target until the August meeting.