The weakness in the economy that emerged late last year has become more persistent and widespread. In response, the FOMC has lowered the target federal funds rate six times this year, for a cumulative total reduction of 2-3/4 percentage points. A number of factors account for this unusually...

The year 2004 was marked by continued expansion in economic activity and appreciable gains in employment. With fiscal policy stimulative, monetary policy accommodative, and financial conditions favorable, household spending remained buoyant and businesses increased investment in capital...