According to the Wall Street Journal "The Federal Reserve is on track to keep its $85 billion-a-month bond-buying program in place at its policy meeting next week, but officials likely will debate changes to the way the central bank describes its plans for the program and for short-term interest rates"
.At their July 30-31 meeting, Fed officials are likely to discuss whether to refine or revise "forward guidance," the words they use to describe their intentions for the next few years.
US Central Bank Chairman has said that it intends to keep short-term interest rates near zero at least until the jobless rate drops to 6.5% or unless inflation rises to a 2.5% annualized rate.
Some Fed officials argue it would be too soon to raise short-terrm rates even after joblessness drops below 6.5%. In part, they see inflation as unthreatening, which means rates can stay low longer. They fear the jobless rate, now 7.6%, doesn't reflect other weaknesses in the labor market, such as people leaving the workforce or working part time when they want full-time work.
Futures markets suggest investors are back to believing a series of rate increases aren't likely until 2015. As a result, officials might decide to avoid any change in their message and leave well enough alone for now.
Source: WSJ
.At their July 30-31 meeting, Fed officials are likely to discuss whether to refine or revise "forward guidance," the words they use to describe their intentions for the next few years.
US Central Bank Chairman has said that it intends to keep short-term interest rates near zero at least until the jobless rate drops to 6.5% or unless inflation rises to a 2.5% annualized rate.
Some Fed officials argue it would be too soon to raise short-terrm rates even after joblessness drops below 6.5%. In part, they see inflation as unthreatening, which means rates can stay low longer. They fear the jobless rate, now 7.6%, doesn't reflect other weaknesses in the labor market, such as people leaving the workforce or working part time when they want full-time work.
Futures markets suggest investors are back to believing a series of rate increases aren't likely until 2015. As a result, officials might decide to avoid any change in their message and leave well enough alone for now.
Source: WSJ
