E6-187. Federal Open Market Committee; Domestic Policy Directive of December 13, 2005

In accordance with § 271.25 of its rules regarding availability of information (12 CFR part 271), there is set forth below the domestic policy directive issued by the Federal Open Market Committee at its meeting held on December 13, 2005.^[1]

The Federal Open Market Committee seeks monetary and financial conditions that will foster price stability and promote sustainable growth in output. To further its long-run objectives, the Committee, in the immediate future, seeks conditions in reserve markets consistent with increasing the federal funds rate to an average of around 41/4 percent.

The vote encompassed approval of the paragraph below for inclusion in the statement to be released shortly after the meeting:

“The Committee perceives that, with appropriate monetary policy action, the upside and downside risks to the attainment of both sustainable growth and price stability should be kept roughly equal. With underlying inflation expected to be contained, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured. Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability.”

By order of the Federal Open Market Committee, January 5, 2006.

Vincent R. Reinhart,

Secretary, Federal Open Market Committee.

Footnotes

1.  Copies of the Minutes of the Federal Open Market Committee Meeting on December 13, 2005, which includes the domestic policy directive issued at the meeting, are available upon request to the Board of Governors of the Federal Reserve System, Washington, DC 20551. The minutes are published in the Federal Reserve Bulletin and in the Board's annual report.