Case Scenario:
This week's biggest economic news was the Fed's decision "not to be patient" in raising the interest rate because the economic growth and other major economic indicators have showing solid growth towards sustained economic recovery for the rest of the year. This decision by the Fed was a major shift from its previous decision "to be patient".
On May 4, 2004 the following press release was issued by the FOMC regarding the above mentioned news:
Release Date: May 4, 2004 (https://federalreserve.gov/boarddocs/press/monetary/2004/20040504/default.htm)
"The Federal Open Market Committee decided today to keep its target for the federal funds rate at 1 percent.
The Committee continues to believe that an accommodative stance of monetary policy, coupled with robust underlying growth in productivity, is providing important ongoing support to economic activity. The evidence accumulated over the inter-meeting period indicates that output is continuing to expand at a solid rate and hiring appears to have picked up. Although incoming inflation data have moved somewhat higher, long-term inflation expectations appear to have remained well contained.
The Committee perceives the upside and downside risks to the attainment of sustainable growth for the next few quarters are roughly equal. Similarly, the risks to the goal of price stability have moved into balance. At this juncture, with inflation low and resource use slack, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured."