E6-12040. Federal Open Market Committee; Domestic Policy Directive of June 28-29, 2006

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 June 28-29, 2006.^[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 51/4 percent.

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

Although the moderation in the growth of aggregate demand should help to limit inflation pressures over time, the Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information. In any event, the Committee will respond to changes in economic prospects as needed to support the attainment of its objectives.

By order of the Federal Open Market Committee, July 21, 2006.

Vincent R. Reinhart,

Secretary, Federal Open Market Committee.

Footnotes

1.  Copies of the Minutes of the Federal Open Market Committee Meeting on June 28-29, 2006, 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.