Fed Issued First Post-Meeting Statement After 1999 Rate Hold

In 1999, the Federal Reserve issued a policy statement after leaving rates unchanged, then raised rates six weeks later. It was the Fed’s first statement following a meeting that held rates steady; before then, it issued statements only after changing rates.

Officials wanted to undo rate cuts made in 1998 while avoiding a repeat of 1994, when inadequate communication caught the market off guard after rate increases. The May 1999 meeting minutes showed officials viewed a rate increase as likely and wanted to guide expectations so markets would not misread their intentions.

The episode shows how officials used a statement to try to prepare markets for a possible rate increase before acting.