- The Washington Times - Tuesday, May 3, 2005

ASSOCIATED PRESS

No government agency is more careful about the statements it releases than the Federal Reserve, where a single word can move financial markets. But it made an error yesterday, dropping a key sentence on inflation.

The Fed alerted reporters to the error one hour and 45 minutes after the initial one-page statement was released, saying the sentence “was dropped inadvertently.”

Fed officials asked news agencies to report the dropped sentence before Wall Street stock trading ended at 4 p.m. EDT.

The initial Fed statement said, “Pressures on inflation have picked up in recent months and pricing power is more evident.”

The dropped sentence, which should have followed immediately after, put the concerns about inflation in a more positive light.

It said: “Longer-term inflation expectations remain well contained.”

The Fed has been issuing statements after interest-rate meetings since February 1994. This is the first error in any of the statements.

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