Over the dissent of two of its members, the Federal Reserve on Tuesday held interest rates steady despite a wobbly economic recovery and worries about a possible war with Iraq. The dissenting pair favored a rate cut -- the first of the year.
Economists said that the 10-2 vote among the members of the Federal Open Market Committee -- the group responsible for setting interest-rate policy -- shows the difficulty even among experts to predict where the economy is heading during these turbulent times.
"This highlights the level of uncertainty and the confusion regarding the economy's outlook and how policy-makers should respond," said Mark Zandi, chief economist at Economy.com. "I don't think you can conclude that [Fed Chairman Alan] Greenspan is losing control."
With Greenspan and his colleagues citing "geopolitical risks" -- something most economists viewed as a reference to Iraq -- as a potential danger to the fragile economy, many analysts said that odds are growing that the central bank will cut rates later this year, possibly at its next meeting on Nov. 6.
On Tuesday, two of the 12 Fed members -- Edward Gramlich and Robert McTeer -- wanted an immediate rate cut and voted against the central bank's decision to leave rates unchanged. That revealed a crack in the unified front often presented to the public.
Greenspan and most of his colleagues, at the closed-door meeting, voted to keep the federal funds rate, the interest that banks charge each other on overnight loans, at a 41-year low of 1.75 percent. It was the sixth consecutive Fed meeting this year that policymakers decided to leave rates alone.
The funds rate dropped to 1.75 percent in December, which marked the last time the Fed lowered short-term rates and the last time a dissenting vote was cast on the FOMC.
UPDATED (3:40pm): A suspected gas explosion at a shopping mall in Taichung this morning has killed four people and injured 20 others, as emergency responders continue to investigate. The explosion occurred on the 12th floor of the Shin Kong Mitsukoshi in Situn District (西屯) at 11:33am. One person was declared dead at the scene, while three people were declared deceased later after receiving emergency treatment. Another 20 people sustained major or minor injuries. The Taichung Fire Bureau said it received a report of the explosion at 11:33am and sent rescuers to respond. The cause of the explosion is still under investigation, it said. The National Fire
ALL-IN-ONE: A company in Tainan and another in New Taipei City offer tours to China during which Taiwanese can apply for a Chinese ID card, the source said The National Immigration Agency and national security authorities have identified at least five companies that help Taiwanese apply for Chinese identification cards while traveling in China, a source said yesterday. The issue has garnered attention in the past few months after YouTuber “Pa Chiung” (八炯) said that there are companies in Taiwan that help Taiwanese apply for Chinese documents. Minister of the Interior Liu Shyh-fang (劉世芳) last week said that three to five public relations firms in southern and northern Taiwan have allegedly assisted Taiwanese in applying for Chinese ID cards and were under investigation for potential contraventions of the Act Governing
ACCOUNTABILITY: The incident, which occured at a Shin Kong Mitsukoshi Department Store in Taichung, was allegedly caused by a gas explosion on the 12th floor Shin Kong Group (新光集團) president Richard Wu (吳昕陽) yesterday said the company would take responsibility for an apparent gas explosion that resulted in four deaths and 26 injuries at Shin Kong Mitsukoshi Zhonggang Store in Taichung yesterday. The Taichung Fire Bureau at 11:33am yesterday received a report saying that people were injured after an explosion at the department store on Section 3 of Taiwan Boulevard in Taichung’s Situn District (西屯). It sent 56 ambulances and 136 paramedics to the site, with the people injured sent to Cheng Ching Hospital’s Chung Kang Branch, Wuri Lin Shin Hospital, Taichung Veterans General Hospital or Chung
STAY WARM: Sixty-three nontraumatic incidents of OHCA were reported on Feb. 1, the most for a single day this year, the National Fire Agency said A total of 415 cases of out-of-hospital cardiac arrest (OHCA) occurred this month as of Saturday, data from the National Fire Agency showed as doctors advised people to stay warm amid cold weather, particularly people with cardiovascular disease. The Central Weather Administration yesterday issued a low temperature warning nationwide except for Penghu County, anticipating sustained lows of 10°C or a dip to below 6°C in Nantou, Yilan, Hualien and Taitung counties, as well as areas north of Yunlin County. The coldest temperature recorded in flat areas of Taiwan proper yesterday morning was 6.4°C in New Taipei City’s Shiding District (石碇). Sixty-three nontraumatic OHCA