Editor’s note: Elizabeth A. Duke was sworn in as a member of the Board of Governors this morning, participated in the meeting and voted.

Policy statements from the Federal Open Market Committee change with the economic conditions. The statement from the Aug. 5 meeting implies that the Fed is leaning toward raising short-term interest rates at some point. Here is a translation from Fedspeak to regular English.

What the Fed said What the Fed meant
FED:

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 2 percent.
Translation:

Just what it says: The target for the federal funds rate remains 2 percent.
FED:

Economic activity expanded in the second quarter, partly reflecting growth in consumer spending and exports. However, labor markets have softened further and financial markets remain under considerable stress. Tight credit conditions, the ongoing housing contraction, and elevated energy prices are likely to weigh on economic growth over the next few quarters. Over time, the substantial easing of monetary policy, combined with ongoing measures to foster market liquidity, should help to promote moderate economic growth.
Translation:

Consumers spent more from April through June, but unemployment went up. Economic growth will be slowed by difficulties in getting loans, falling house prices and higher fuel prices. Low short-term interest rates, plus efforts to prop up Fannie Mae and Freddie Mac, should stimulate the economy.
FED:

Inflation has been high, spurred by the earlier increases in the prices of energy and some other commodities, and some indicators of inflation expectations have been elevated. The Committee expects inflation to moderate later this year and next year, but the inflation outlook remains highly uncertain.
Translation:

Inflation has been high, spurred by increases in prices of fuel and other commodities, and people are starting to factor inflation into their financial decisions. The Fed expects the inflation rate to fall late this year and next year, but isn’t willing to bet the farm on that.
FED:

Although downside risks to growth remain, the upside risks to inflation are also of significant concern to the Committee. The Committee will continue to monitor economic and financial developments and will act as needed to promote sustainable economic growth and price stability.
Translation:

Concerns about recession and inflation aren’t quite balanced, because the prospect of higher inflation is worrisome.
FED:

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Elizabeth A. Duke; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; Sandra Pianalto; Charles I. Plosser; Gary H. Stern; and Kevin M. Warsh. Voting against was Richard W. Fisher, who preferred an increase in the target for the federal funds rate at this meeting.
Translation:

The decision to keep rates unchanged was not unanimous. The dissenter was Richard Fisher, president of the Federal Reserve Bank of Dallas, who wanted to raise the federal funds rate to repel inflation.