23 Sep 2005 Damn the Hurricanes, All Ahead “Measured Pace”

If they were considering a pause in their relentless rate increases the Federal Reserve Governors missed a great opportunity to both assess the effectiveness of past increases as well as to show a little social empathy.  They called Hurricane Katrina's economic disruption only temporary and made no mention of the potential economic cost of Hurricane Rita as it raced toward the heart of the nation’s oil, gas, and gasoline production facilities.  Instead of pausing they raised the federal funds rate by a quarter percentage point to 3.75%.  The increase marked the 11^th time since June 2004 and the longest sustained tightening campaign since 1977-79, when the Fed was fighting runaway inflation.