In such a situation where the average growth rate has declined, various economic indicators have shown large fluctuations and differences among industries and firm size. Therefore, it has become difficult to capture the underlying trend. This difficulty has heightened uncertainty regarding the U.S. economy, and is one reason for the increasing short-term fluctuations of sentiment.
In addition, the interest rate on the marginal lending facility will be increased from 3.5% to 4.0% and that on the deposit facility from 1.5% to 2.0%, both with effect from 5 November 1999. Overall, on the basis of prospective developments, the Governing Council considers that today’s decision will counter the upward trend of the balance of risks to price stability.