Federal Reserve policymakers decided to leave interest rates unchanged earlier this year because data suggested moderate economic growth with little sign of inflation, according to minutes released Friday.
"Much of the information reviewed at this meeting had been influenced to an uncertain degree by unusually severe winter weather, industrial strikes and U.S. government shutdowns," the minutes of the Federal Open Market Committee said."On balance, however, growth of economic activity appeared to have picked up after having slowed appreciably in late 1995," they added. "The recent data gave little indication of any change in underlying inflation trends."
As a result, the committee voted 10-0 to leave short-term interest rates unchanged, agreeing, "The economy seemed to have adequate forward momentum and did not appear to require any further stimulus."
Immediately after the March 26 meeting, Fed Chairman Alan Green-span testified before Congress that the economy appeared "to be running at a reasonably good clip."
At their previous meeting, Jan. 30-31, FOMC members had expressed concern about a "significant" risk of an economic slow-down and voted to cut the federal funds rate from 5.5 percent to 5.25 percent.
It was the third reduction in seven months in the funds rate, which banks charge each other for overnight loans.