Inventory restocking
Economic data since then have implied the recovery from the recession that began a year ago is gaining momentum, in part because businesses, which sold down inventories sharply last year, are being forced to ratchet domestic production higher to restock depleted shelves.
The Fed's post-meeting economic diagnosis came on the heels of Fed Chairman Alan Greenspan's statement to Congress earlier this month that a recovery was "well under way." However, he warned that the renewal may be less robust than past rebounds.
The Fed, first attempting to rescue the economy from a business-led downturn and then from the shock to confidence from the Sept. 11 attacks, carried out one of the most aggressive rate-cutting sprees in its history last year, slashing rates by a total of 4.75 percentage points.
But now the tide appears to have turned for the economy.
Last Friday, the central bank said industrial output gained 0.4 percent in February, the strongest monthly pickup since mid-2000 and an indication of brighter days ahead for the downtrodden manufacturing sector.
The government said earlier on Tuesday that a rising volume of imports helped widen January's trade deficit -- which analysts said was a sign companies also are turning to imported goods to replenish stocks of goods.
And so far, there have been few signs of mounting inflationary pressures. The Labor Department said last Friday that producer prices rose a modest 0.2 percent last month after a slim 0.1 percent January pickup.
The National Bureau of Economic Research, the academic group that dates US business cycles and which pegged the recession's start as March last year, announced a week ago the downturn "may be coming to an end."
NBER cited a modest 66,000-job addition to February payrolls -- the first such improvement in seven months -- as a key reason for its optimism that the world's largest economy was on the mend.
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